Expo Real SPECIAL 2012 - hospitalityInside.com

Transcription

SPECIAL
O c T O B E R 2 012 // Exp o R e al Edi t ion for hospitali ty & Re al Estate E x perts
Joint stand
“World of Hospitality”
World of Hospitality
“Board Room” C1.116
Exhibitors in the EXPO REAL network
of hospitalityInside:
Schoerghuber UnternehmensgruppeA1.214
RMDS Hotel Development B1.120
Deutsche Hypothekenbank
B1.344
Union Investment
B2.142
WTSH – Business Development and
B2.330 + C2.234
Technology Transfer Corporation of Schleswig-Holstein
Motel One GroupC2.010
“World of Hospitality” joint stand
C2.234
ACCOR Hospitality GermanyC2.234
bbg-CONSULTINGC2.234
Christie + Co.C2.234
Grand City HotelsC2.234
HospitalityInsideC2.234
HOTOUR Hotel ConsultingC2.234
InterContinental Hotels GroupC2.234
Jung & Schleicher RechtsanwaelteC2.234
Kohl & PartnerC2.234
Lindner Hotels & ResortsC2.234
Louvre Hotels GroupC2.234
Rilano Hotels & ResortsC2.234
Siemens Financial Services C2.234
Treugast Solutions GroupC2.234
SPECIAL REAL ESTATE FORUM
HOSPITALITY INDUSTRIE DIALOGUE
hospitalityINSIDE Special EXPO REAL 2012
October 2012
Dear hospitalityInsiders and visitors of EXPO REAL 2012,
You‘re holding the third hospitalityInside EXPO REAL SPECIAL magazine in your hands:
you have this high-quality print issue with 100 pages and the e-magazine that can be accessed at
www.hospitalityInside.com anytime. Be sure to take enough copies from the trade fair with you or send
the link to your business partners.
In this unique, purely hotel-focused publication at EXPO REAL, you will find – both in German and
English – articles on issues relevant to the trade fair and the industry, e.g. on hotel markets, brands,
financing, agreements, and trends.
Naturally, we promote our own activities and our partners in this issue, but at the same time, the selection of articles gives you a good impression of the way we report all year. hospitalityInside focuses on
information and objectiveness. The fact that we do so without any advertising in the online magazine
means a vital boost in quality for both authors and readers.
It is all the more appreciated when well-known companies from real estate/investment and the hotel
industry are once again willing to place an advertisement in a special issue like this one. We would like
to say a big thank you to our advertisers for this, and we are very happy that a high-quality context is
appreciated in this way.
We define journalism as “information network” – and this is exactly what we practice here at
EXPO REAL. Each year stronger, both online and offline. Together with the trade fair, our young publishing company is becoming a motor of the hospitality industry. For the fifth time, I am organizing the
“Hospitality Industry Dialogue” hotel conference, for the fourth time, hospitalityInside and EXPO REAL
invite select guests to the relaxed “Bricks & Brains” get-together and networking event, for the third
time, we are publishing this SPECIAL issue, and for the second time, we have initiated the “World of
Hospitality” joint booth.
Measuring 168 square metres, this booth is twice as big as at last year‘s premiere! We consider this
a clear vote of our co-exhibitors in favour of EXPO REAL and it shows that the sector is clearly willing to
assert itself as a trustworthy asset class next to commercial real estate.
The 14 “World of Hospitality” exhibitors are partly worldwide active, highly specialized and nameable
companies (in alphabetical order): Accor Hospitality, bbg-CONSULTING (new), Christie + Co, Grand
City Hotels, Hotour Hotel Consulting, InterContinental Hotels Group, the law firm Jung & Schleicher
Rechtsanwaelte (new), Kohl & Partner Consulting (new), Lindner Hotels & Resorts, Louvre Hotels Group
(new), Rilano Hotels & Resorts (new), Siemens Financial Services (new), Treugast Solutions Group (new),
and WTSH – Business Development and Technology Transfer Corporation of Schleswig-Holstein.
Seven of these partners ventured to share last year‘s premiere with us and agreed to take part this year
right afterwards. And several sponsors of our “BRICKS & BRAINS” networking event are just as loyal:
for the fourth time, Kempinski Hotels & Resorts will be the main sponsor. In addition, (Treugast) Solutions
Holding, Choice Hotels, RMDS Hotel Development and bbg-CONSULTING are also back on board.
A new partner in 2012 will be Fondara Unternehmensgruppe owning Riem Hotels Munich located right
next to the trade fair grounds, opening its doors for you in 2013!
The hospitalityInside team wishes you a successful EXPO REAL 2012!
Maria Puetz-Willems
Editor in Chief
hospitalityInside.com
3
October 2012
CONTENT
Editorial
3
Focusing on investment
8
Rotten conditions
22
10 Consulting companies:
Financing terms increasingly drastic
EXPO REAL Exhibition Director Claudia Boymanns
4
on the 2012 fair
AIFM Directive: Spectacular development
11th Hospitality Industry Dialogue
10
Topics: Financing, assets, expansion,
triangular agreements, apartments
Who is Who?
The partners of the joint stand “World of Hospitality”
Monday night: Get together introduce new regulations for funds
28
13 hotel chains on location criteria
Double Effects
18
Multiple brands multiply themselves:
20
Things are better without Fourth networking event “BRICKS & BRAINS”
Caught in the downward maelstrom
German Ministry of Finance and EU
A, B oder C?
12
26
32
Higher synergies, better results
More hotels than demand: Only economy
No common stance on
and politics are able to change this
owner agreements among chains
34
IMPRINT
Publisher: hospitalityInside GmbH, Paul-Lincke-Strasse 20, 86199 Augsburg, Germany, www.hospitalityInside.com // Editorial office: Maria PuetzWillems, Editor-in-chief, hospitalityInside.com // Articles: The articles published in this Special are written on the occasion of EXPO REAL 2012 or are
extracts of articles published in the online magazine www.hospitalityInside.com // Authors: Maria Puetz-Willems, Susanne Stauss, Beatrix Boutonnet //
Title: Supported by wordle // Photos were kindly provided by the hotels and persons mentioned // Other photos by Maria Puetz-Willems //
Advertisements: This Special is kindly supported by Bayerische Hausbau, Christie + Co, Deutsche Hypothekenbank, Hotour Hotel Consulting, Derag
Living Hotels, Motel One, Union Investment // Layout: Cornelia Anders, www.blueorangeblue.de // Print: Druckerei Steinmeier, www.steinmeier.net //
Copyright: hospitalityInside GmbH. This content is protected by law. Publishing this content or parts of it in print or online media requires the written
permission of hospitalityInside GmbH. In case of violation we will charge current market fees. Beyond, we reserve the right to take legal action and claim
damages.
October 2012
The value of opinion
36
How social media influence real estate values
Switzerland facing test of endurance
38
Swiss franc and euro also challenge foreign
hotel companies
Hospitality made in Qatar
5
40
How Katara Hospitality acquires real estate
and plans its expansion
A rough diamond, not for sale
25 years InterCity: Managing Director Marusczyk
about ways & values
44
Competition for Garden Inn and Courtyard 47
Hyatt Place comes to Europe – with regional adaptations
It‘s all in the mix
48
Derag and Living Hotels on serviced apartments,
hotels and marketing
PARTNERS AND SPONSORS:
Partners of the joint stand “World of Hospitality” (in alphabetical order): Accor Hospitality, bbg-CONSULTING, Christie + Co,
Grand City Hotels, Hotour Hotel Consulting, InterContinental Hotels Group, Jung & Schleicher Rechtsanwaelte, Kohl & Partner
Consulting, Lindner Hotels & Resorts, Louvre Hotels Group, Rilano Hotels & Resorts, Siemens Financial Services, Treugast Solutions
Group, WTH – Business Development and Technology Transfer Corporation of Schleswig-Holstein
Partners of the networking event “BRICKS & BRAINS” (in alphabetical order): bbg-CONSULTING, Choice Hotels Europe,
Kempinski Hotels & Resorts, Riem Hotels Munich/Fondara Unternehmensgruppe, RMDS Hotel Development, Solutions Holding.
October 2012
E
A
6
quick access to reliable information has
always been the decisive element in the
success of any person or business. Today,
new media produce a constant flood of data, yet reliable sources are hard to come by.
More and more, users invest in research time
while doubting the quality of information
available.
Hence, hospitalityInside was born in 2005
on the vision of a information network between expert journalists and hotel executives.
Clear rules, transparent price structures and
information headings differentiate information
fields, currently subdivided into the editorial
”magazine“, into ”Solutions“ for specific information by the industry‘s service providers and
suppliers, and in ”Network“ for conferences,
events and all future social media activities.
• h ospitalityInside.com is a purely editorial
independent magazine with focus on the
international hotel industry.
• Online distribution ensures rapid and reliable delivery of important news to all corners of the globe (inter alia, by way of
”Breaking News“).
• The target group comprises of managers
in the hotel industry and associated industries.
• The magazine is published every Friday
(48 times per year).
• It completely appears in two languages
(German/English).
• The online magazine is entirely free of
advertisements.
The aim of the magazine is to bring transparency into the hotel market. The geographical focus of reporting is currently on Europe and the Middle East, though does include international hotels, hotel groups and associated markets and players. The editorial
team provide their own research based contributions with in-depth articles, background
reports and further interesting links.
Who does What Where When Why and
How? hospitalityInside will tell you – and
more.
YOUR CONTACTS:
Messe Muenchen GmbH
Exhibition Director EXPO REAL
Claudia Boymanns
Trade Fair Centre
81823 Munich
Germany
phone +49-89-94 92 04 30
fax +49-89-94 99 72 04 30
claudia.boymanns@
messe-muenchen.de
www.messe-muenchen.de
www.exporeal.net
HospitalityInside GmbH
Michael Willems
Managing Director
(Coordination Stand and Events)
Paul-Lincke-Strasse 20
86199 Augsburg
Germany
phone +49-821-885 880 20
fax +49-821-885 880 01
[email protected]
www.hospitalityInside.com
Maria Puetz-Willems
Editor in Chief
(Coordination Conference
and Special)
Paul-Lincke-Strasse 20
86199 Augsburg
Germany
phone +49-821-885 880 10
fax +49-821-885 880 01
[email protected]
XPO REAL, the
15th International
Trade Fair for Commercial Property and
Investment, is being
held at the New Munich Trade Fair Centre from 8 to 10 October 2012. It is a key
networking event for interdisciplinary and international projects, investment and finance.
It caters to the full spectrum of the property
sector, offering an international networking
platform for markets spanning from Europe,
Russia and the Middle East to the United
States. The fair‘s extensive programme of
conference events, featuring some 500
speakers, gives participants valuable insight
into the latest trends and innovations in the
property, investment and finance market.
A total of 1,610 companies from 35 countries exhibited at the EXPO REAL 2011.
The event attracted more than 37,000 participants from 72 countries and took up six
exhibition halls, covering 64,000 square
metres of space. The statistics for EXPO REAL are audited by an independent
accountant on behalf of the Gesellschaft zur
Freiwilligen Kontrolle von Messe- und Ausstellungszahlen (FKM, Society for Voluntary
Control of Fair and Exhibition Statistics)
(www.exporeal.net).
M
esse Muenchen
International (MMI,
Munich Trade Fairs International Group) is one of the world‘s leading
trade-fair companies. It organizes around
40 trade fairs for capital and consumer
goods, and key high-tech industries. Each
year over 30,000 exhibitors from more
than 100 countries, and over two million
visitors from more than 200 countries take
part in the events in Munich. In addition,
MMI organizes trade fairs in Asia, Russia,
the Middle East and South America. With
six subsidiaries abroad – in Europe and in
Asia – and more than 60 foreign representatives serving over 90 countries, MMI
has a truly global network. Environmental
protection and sustainability are key priorities in all MMI‘s operations, at home and
abroad.
Anzeige
Union Investment:
A multi-brand property portfolio
October 2012
By making multiple brands the
trademark feature of an internationally diversified hotel
portfolio, Union Investment
has demonstrated how the
investment potential of hotels can be successfully leveraged in the context of openended real estate funds. With
a total of 12 hotel brands
currently “on board”, ranging
from Arcotel to Hilton and
Steigenberger, its holdings
in this complex asset class
boast a letting ratio of 100%
and average leases of 13.7
years. The property fund man“Radisson Blu Royal Hotel”, Brussels, Belgium
ager, which currently manages hotel assets worth
around EUR 1.6 billion comprising 25 properties in the two- to fivestar segment, aims to extend its strong position in the European hotel investment market by further developing its hotel expertise and
entering into new strategic partnerships. “The general environment
and investment regime require increasing specialisation from institutional investors both on the transaction side and in terms of portfolio
and contract management,” says Andreas Löcher, head of Asset Management Hotels at Union Investment Real Estate GmbH, Hamburg.
“We are expanding our in-house expertise in this area with the objective of implementing individual contract structures for our investment
products in future, such as franchise agreements or triangular arrangements whereby tenants sign a management agreement with an international operator.” The second cornerstone of the company’s hotel
strategy is to develop partnerships with leading, financially strong national and international hotel operators with a proven track record.
“Our hotels traditionally give our open-ended real estate funds a significant performance boost. Even in tough economic times, performance is not undermined by loss of rent,” adds Löcher. “Alongside
monitoring hotel performance, the choice of operator is a key function of hotel asset management.”
At around 8%, hotels already represent a strategically important proportion of total property assets and Union Investment plans to further
increase this figure, partly by acquiring development projects. “We are
also looking for investment opportunities involving forward purchase
structures,” says Löcher. Business, trade show and airport hotels with a
minimum of 120 rooms are all in the frame, with major cities in Western Europe forming the focus of investment, especially locations with
an international gateway function such as Amsterdam, London and
Paris. Union Investment is particularly interested in focused-service hotels and has already entered into strategic partnerships with Motel One
and Holiday Inn Express.
Union Investment takes care
to ensure that its hotel investments meet key sustainability requirements, having
started to embed sustainability into its investment processes many years ago. At
the start of 2012, Union Investment became one of the
first large property holders
in Germany to carry out a
comprehensive sustainability analysis of its global property portfolio, which currently
includes 23 properties with
a total value of EUR 3.4 billion that are certified in accordance with national or
“Hotel Crowne Plaza Amsterdam-Zuid”,
international sustainability
Amsterdam, Netherlands
standards such as BREEAM,
DGNB, HQE and LEED. The
Scandic Hamburg EMPORIO, which forms part of Union Investment’s
property portfolio, was one of Germany’s first hotels to be pre-certified Silver by the German Sustainable Building Council (DGNB). Andreas Löcher: “Today, hotel brands with a quality focus can no longer
afford to ignore sustainability when planning, developing and operating their properties.”
Contact:
Union Investment Real Estate GmbH
Asset Management Hotels
Andreas Löcher
Valentinskamp 70 / EMPORIO
20355 Hamburg, Germany
Tel.: + 49 40 - 34919 - 4711
E-mail: [email protected]
Internet: www.union-investment.com/realestate
“Scandic Hamburg EMPORIO”, Hamburg, Germany
#14) UIR Image Text Ad 185x260 GB.indd 1
11.09.12 12:48
October 2012
EXPO REAL Exhibition Director Claudia Boymanns on the 2012 fair
Focusing on investment
Munich (October 8, 2012). Aside of concentrating on real estate, the 15th EXPO REAL Munich will be increasingly
focusing on the investment segment. This is why particularly the growing activities connected to the hotel industry are
a welcome element of the trade fair mix: at the 2nd „World of Hospitality“ joint booth, at the „BRICKS & BRAINS“
networking event and in the course of the „Hospitality Industry Dialogue“ hotel conference, investors and operators
will be meeting each other. Again, the number of exhibitors remains stable this year. The fair is trying to create
customer loyalty by improving its services and new online tools. EXPO REAL Exhibition Director Claudia Boymanns
talked to Maria Puetz-Willems about the 2012 trade fair.
8
15 years of EXPO REAL – and since
2010, the trade fair bears a new name:
it no longer focuses solely on commercial
real estate, but also on investment accor
ding to the extended subtitle. Why is
this?
Claudia Boymanns: Extending the subtitle
by the term „investment“ points out that
EXPO REAL has turned into a meeting point
for real estate investors – more than originally intended. This refers to both companies seeking to invest their money as well
as those locations and companies on the
lookout for investment. At the same time,
the segment of hotel real estate has
aroused the investors‘ attention. However,
most hotel chains act only as operators,
while institutional and/or private investors
invest in the property itself.
What can you report on EXPO REAL
bookings compared to the previous year?
In which segments do you record the
biggest changes?
October 2012
Fixed and virtual
meeting points
Claudia Boymanns,
Exhibition Director EXPO REAL
Boymanns: We are happy to record stable
bookings and expect about 1,600 exhibitors, similar to last year. Some of them have
enlarged their booths. Unfortunately, we
cannot provide any information on the development of individual segments before
your editorial deadline, as acquisition is still
running. However, there will be a new joint
booth of the logistics industry titled „Log
RealCampus“, which makes it possible to
extend the area for logistics real estate.
Last year saw the first “World of Hospita
lity” joint booth. How does the trade
fair see this project and what were the
reactions from your perspective?
Boymanns: From our point of view, the first
joint booth was a great success. The booth
was well frequented on all days and exhibitors where highly satisfied with the whole
appearance and the reactions.
The fast growth of this year‘s joint booth reaching twice the size compared to last year
is a clear sign for the growing interest in
hotel real estate as an asset in general. At
EXPO REAL, the hotel industry has the opportunity to meet the right people to find
new locations and realize new projects. In
turn, these people meet the necessary operators ensuring high yield. In short: it is the
perfect opportunity to establish new
contacts for new collaboration.
As mentioned before, this year‘s second
“World of Hospitality” is already twice as
big as last year, which makes hospitali
tyInside really happy being its initiator
and coordinator. How could the trade
Both at the hospitality booth and the hotel
conference on Monday, the Hospitality
Industry Dialogue, sees a growing
number of noteworthy and international
experts and companies. How do you
consider the industry‘s competence com
pared to other segments present at the
trade fair?
Boymanns: The Hospitality Industry Dia
logue hotel conference has been a fixed
part of the EXPO REAL programme for many years. Being the organizers, we are
very happy that the hotel industry has recognized the value of EXPO REAL as a place
to gather information and a marketplace.
Year after year, the well-frequented event
attracts a growing number of visitors.
However, we‘re not looking for unlimited
growth. Instead, we aim for maintaining
quality of the content and giving participants an idea of current issues and trends
important to the hotel industry.
What services do you offer both exhibi
tors and visitors?
Boymanns: Services and online tools are
getting more and more important when it
comes to preparing and planning a visit to
the trade fair. Therefore, we aim at constantly improving them to their benefit simplifying their planning process. Accordingly, this year the participant database
will be extended enabling each visitor to
book a detailed profile, e.g. including an
image, a company logo as well as a QR
code.
The „personal trade fair office“ of
my.exporeal.net is not new but still rather
unknown. Using the organizer feature,
visitors may administer contacts, make appointments with exhibitors and other visitors, as well as prepare a personal event
calendar. My.exporeal.net is connected to
both a participant database and the conference programme. Important contacts
from the database or an interesting panel
discussion can be directly highlighted and
will be transferred to the „personal trade
fair office“.
Similar to last year, both the EXPO REAL
app and a mobile website will be at the
visitors‘ disposal. In addition, there will be
an EXPO REAL blog for the first time summarizing all social media activities during
the trade fair. Via our blog, visitors also
have the opportunity to participate in the
Johann Jacob Astor Competition.
There is a connection to the hotel industry
here, too: Johann Jacob Astor from New
York owned and operated two hotels, the
City Hotel and The Astor House, the most
exclusive hotel of its time which even provided running water. The competition is to
award particularly social-cultural, sustainable and ecological commercial real estate
projects. The winner will be voted on by
the social media community. The prize will
be awarded on the second day of EXPO
REAL 2012.
Trade fairs are perfectly suited for quick,
direct communication and interaction.
We wish EXPO REAL good luck in 2012!
Thank you very much for the interview.
fair management support this industry
segment this year and in future even
more?
Boymanns: We are very happy that the
„World of Hospitality“ joint booth and, as
a result, the hotel segment is experiencing
such positive development. We plan to
continue growing in this field while
maintaining quality, and go on supporting
the hotel sector at EXPO REAL. Accordingly, there will be a dedicated advertising campaign covering the hotel sector
addressing visitors in order to attract even
more interested visitors.
In order to support networking in connection with the hotel industry and partners
from the real estate segment, we offer our
exclusive BRICKS & BRAINS event on the
first day of the trade fair. In the past three
years, this event was very well frequented
and thus provides a perfect background
for establishing new contacts and caring
for existing ones.
9
October 2012
TOPICS: Financing, assets, expansion, triangular agreements, apartments
11th Hospitality Industry Dialogue
Munich (October 8, 2012). Financing, financing, financing ... this term dominates a huge number of talks across the hotel
sector. This is why the hotel conference at EXPO REAL 2012 deals with this issue in a two-hour mega session. The audience
is requested to participate, as they are allowed to ask more questions than before during the panel discussion. Concerning
real estate assets there is the question whether real estate management was necessary. Is yield still calculable? And is chain
expansion in truth solely about pushing competitors out of the market? Topics like these make sure that the 11th „Hospitality
Industry Dialogue“ has its finger again on the pulse of time (see programme below). Experience about 25 international
and top-notch experts from the fields of real estate, investment and hospitality on Monday, October 8, 2012. Some will be
appearing at Expo Real for the first time. Between 10.30 am and 5.30 pm at the „Special Real Estate Forum“ in hall C2.
10
10.30-12.20 h
12.30-13.20 h
15.30-16.20 h
Hotel Financing: Different stories,
different players?
2 hours-non stop talk including questions by
the audience
Asset management: Predictable yield?
Moderation: Markus Beike, Managing
Director, Christie+Co
Chain reactions: The malicious triangle
of ownership, lease and franchise
Moderation: Susanne Stauss, Senior Editor,
Moderation: Christoph Haerle, CEO
Continental Europe, Jones Lang LaSalle
Hotels & Maria Puetz-Willems, Editor in
Chief, hospitalityInside.com
Panel:
• Key Note: Paul Slattery, Director Otus &
Co Advisory Ltd.
• Michael Hartmann, Senior Vice President Head Market Development Board
Hospitality and Entertainment, Siemens
Financial Services
• Christof Winkelmann, Managing Director
Special Property Finance, Aareal Bank
• Uwe Niemann, Bank Departmental
Head, Deutsche Hypothekenbank
• Peter Norman, Senior Vice President
Acquisitions & Development EAME,
Hyatt International
• Desmond Taljaard, Chief Operating
Officer Europe, Starwood Capital
• Peter Norman, Senior Vice President
Acquisitions & Development EAME,
Hyatt International
• Prof. Dr. Werner Pauen, Professor of
Tourism & Controlling and Real Estate
Valuation Expert Witness
Panel:
•M
arkus Semer, Senior VP Corporate
Affairs & Strategic Planning, Kempinski
Hotels & Resorts
•A
ndreas Loecher, Head of Division Asset
Management Hotel, Union Investment
Real Estate
•H
eribert Gangl, Senior Associate,
Hamilton Hotel Partners
• P rof. Stephan Gerhard, CEO,
Treugast Solutions Group
13.30-14.30 h BREAK
14.30-15.20 h
Development without limits? Capturing
market share by expanding
Moderation: Martina Fidlschuster, Mana
ging Director, Hotour Hotel Consulting
Panel:
• R olf Huebner, Director of Operations
Central & Eastern Europe, InterContinen
tal Hotels Group
•M
ichael Muecke, Managing Director & SVP
Operations ibis, Accor Hospitality Germany
• P rof. Andreas-Norbert Fay, Chairman
of the Advisory Board, Fay Projects
• Ian Biglands, Director of Development,
B&B Hotels
Panel:
• Margit Hug, Managing Director Central
European Operations, Choice International
• Christian Windfuhr, CEO, Grand City
Hotels
• Gert Prantner, Managing Partner,
RIMC Int. Hotel Resort Management &
Consulting
• Dr. Mathias Jung, Founder & Partner,
Jung & Schleicher Lawyers
16.30-17.30 h
Niche hotels: Serviced apartments
& dormitories
Moderation: Prof. Dr. Christian Buer,
Head of Tourism Management/Hotel Management, Heilbronn University
Panel:
• Prof. Dr. Max M. Schlereth, Managing
Partner, Derag Living Hotels
• Reiner Nittka, Chairman, GBI AG
• Rainer Nonnengaesser, Chairman of the
Board, Youniq AG
• Matthias Niemeyer, Head of Development Germany, Toga Hospitality
October 2012
Portraits Panellists
Desmond Taljaard
Peter Norman
Markus Semer
Desmond Taljaard, Chief Operating
Officer Europe of Starwood Capital Group
(SCG) is responsible for all asset management, and for growing SCG’s asset management base in Europe. In 2009 he led
the acquisition out of bankruptcy of the
Golden Tulip Group. He joined SCG in
November 2006 from Whitbread Group.
Peter Norman, Senior Vice President
Acquisitions & Development EAME of Hyatt
Hotels Corporation has held development
positions in a number of international hotel
groups including Dolce, Le Meridien, Marriott, Whitbread and Choice Hotels. He has
been involved in all aspects of real estate
finance, development and consulting for
more than 25 years. Earlier in his career,
Peter held operational roles with groups
such as Hilton and Accor in France, Germany, Sweden and the UK.
Markus Semer, Senior VP Corporate Affairs &
Strategic Planning of Kempinski Hotels &
Resorts started his career in 2002 as part of
Kempinski’s development team after gaining
Andreas Loecher
Margit Hug
his MBA degree from Ecole Hotelière de
Lausanne. In 2008, he was appointed member of the management board of Kempinski
with responsibilities for strategic planning,
legal services, corporate communications and
people services as well as corporate affairs.
Andreas Loecher is a Head of Division of
Asset Management Hotel at Union Investment Real Estate GmbH, Hamburg, since
July 2010. He is in charge of the hotel
investment strategy and coordinates all Hotel
Acquisitions and Sales as well as Asset
Management activities within the Hamburgbased property investment company. Prior to
joining Union Investment, he was a Head of
Hotel Acquisitions & Sales at Deka Immobi
lien GmbH, Frankfurt and a Vice President at
Aareal Bank AG, Wiesbaden, responsible
for real estate finance (hotel).
Margit Hug, Managing Director of Choice
Hotels Franchise GmbH since 2006, is a
qualified banking professional focused on
hotel and restaurant management already
during her studies of business administra-
Gert Prantner
Rainer Nonnengaesser
tion. After one and a half years as project
manager for Paulaner Brewery, Margit
joined Choice Hotels as Director Franchise
Service in 2001.
Gert Prantner, Managing Owner of the
RIMC International Hotel Resort Managment
and Consulting GmbH started his career in
the hotel industry in 1954. A Cornell graduate, became Managing Director and CEO
of the Hotel Vier Jahreszeiten in Hamburg in
1968 and stayed on until 1993. In 1990,
he already founded RIMC planning and
realising hotels and mixed-use concepts
in Austria, Benelux, Germany, India, Italy,
Russia and Switzerland today.
Rainer Nonnengaesser was appointed the
chairman of the Management Board of
YOUNIQ AG on 1 July 2010. During his
20-year career in the real estate sector, he
held various management positions within
Union Investment and the AXA Group starting in 1998. Among others, he was
responsible for investments and project
development at the AXA Group.
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Stand B1.344
EXPO REAL Munich
8–10 October 2012
11
October 2012
12
THE PARTNERS of the joint stand ”WORLD OF HOSPITALITY“
Who is Who?
ACCOR, the world‘s leading hotel operator
and market leader in Europe, is present in
92 countries with more than 4,400 hotels
and 530,000 rooms. Accor‘s broad portfolio of hotel brands – Sofitel, Pullman,
MGallery, Novotel, Suite Novotel, Mercure, Adagio, ibis, all seasons/ibis Styles,
Etap Hotel/Formule 1/ibis budget and
hotelF1 – provide an extensive offer from
luxury to budget. With more than 180,000
employees (including 145,000 in owned,
leased and managed hotels) in Accor
brand hotels worldwide, the Group offers
to its clients and partners nearly 45 years
LOGO
Nº dossier : 20110049E
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of know-how and expertise. In Germany
Accor is represented by over 330 Hotels of
the brands Sofitel, Pullman, MGallery,
Novotel, Suite Novotel, Mercure, Adagio,
ibis, all seasons/ibis Styles, Etap Hotel/
ibis budget and Formule 1.
www.accor.com
Date : 31/05/11
Validation DA/DC :
Validation Client
BBG-CONSULTING: Founded in 1962,
the company is with 50 years of experience Europe’s pioneer in consulting services
for hotel-development, foodservice-design
Hall
C2
Stand
234
and event-catering. The full-service concept
includes market analyses, concept design,
feasibility studies as well as functional building-design advisory, foodservice design,
realization and market-introduction.
The proven experts combine economical
goals with an optimal workflow organization and solutions for an efficient functional
design. This holistic approach prevents conventional interface problems; thereby maxing out an asset’s full earning power.
BBG-Consulting realized over 9,000 consulting and design projects and specified
over 350 million Euro of FF&E which makes
the company one of the leading players in
this field. Multiple international awards document excellence in innovation and design
for hotels and foodservice operations of
October 2012
any kind. This performance is based on
more than 10 years of fundamental and
engineering research within the hotel and
foodservice industry, also on behalf of the
German Federal Ministry for Education and
Research.
For 44 years, BBG-Consulting also publishes Germany’s leading industry benchmarks, known as “Betriebsvergleich Hotellerie & Gastronomie Deutschland”, in which
over 800 operations of any kind participate.
This combination of profound market expertise, business knowledge, organizational
and technical know-how, experience in
design-work as well as in market launch
and management makes BBG-Consulting
an ideal partner. Accordingly, the main
activities of BBG-Consulting concentrate on
concept and project development, asset
management as well as repositioning.
www.bbg-consulting.com
CHRISTIE + CO was established in London
in 1935 and is Europe’s leading agent and
adviser in the hotel property sector. In addition to hotel transactions, the company
offers informed consultancy and valuation
services. Operating in 26 offices worldwide with more than 250 specialists, who
combine their understanding of regional
and national markets with their vast knowledge of current market trends and local distinctions, Christie + Co transacts around
300 hotels a year in Europe. Further information can be found on www.christiecorporate.com and www.christie.com.
GRAND CITY is a European Hotel Management company operating more than
110 hotels in the 2, 3, 4 and 5-star categories in Germany, the Netherlands, Belgium, Austria, Cyprus, Spain, and
Hungary.
Hotels under Grand City management significantly improve their revenues and profitability as a result of Grand City’s excellent
management, sales and marketing, e-commerce and cost control expertise as well as
professional property upgrades and refurbishments.
Hotels taken over by Grand City perform
highly above market average and show
significant improvements over their own
past performance. The hotel‘s turnaround
process typically takes 1 to 2 years.
Grand City operates several of their hotels
under strategic franchise agreements with
various world renowned brand names as
well as under their own “Grand City
Hotels” brand. It is the strategy to grow the
company to over 160 hotels within the next
two years.
For the second consecutive year, Grand
City has been rated “AA” by Treugast. This
rating is based on various parameters,
among them the analysis of the financial
data, the composition of the portfolio and
the strategic orientation of the company
such as contracting and partnership.
www.grandcityhotels.com
HOSPITALITYINSIDE is the initiator of the
joint stand “World of Hospitality”. The
Augsburg-based company publishes the
online magazine www.hospitalityInside.
com addressing to the management of the
international hotel industry and related
industries in German and English language.
Furthermore, the company connects executives of the industries during fairs, workshops, hotel conferences and own events
by its grown information network.
HOTOUR HOTEL CONSULTING: The goal
of the Frankfurt-based consulting firm is to
support clients with lasting effect in the
most varied of problems and strategically
important decisions in all phases, from the
project development up to the hotel ope
ning. The foundation for the success of a
Stand Talk 2011: 5 minutes plain
talking with Lukas Hochedlinger,
Christie & Co.
13
14
long-term added value is a creative solution approach and individually tailored
consultation services. Hotour‘s fields of
activity: “Transaction Consulting” for Purchasers, Sellers and Banks: Valuations;
Hotel-specific and management analysis /
due diligence; Search for investors and
operators Preparation and support of
negotiations.
“Project Development Consulting” for
Project Developers, Investors and Banks:
Feasibility studies and plausibility appraisals; Hotel development, conception and
planning of new or reconstructed buildings;
Search for investors and operators.
“Asset Management” for Banks, Owners
and Investors: Hotel check: building, operator and budget assessment; Preparation of
business plans; Coaching and monitoring
with detailed reporting; Implementation of
interim management or new operator;
Project management of renovation works.
“Hotel Appraisals” for Banks, Investors,
Project Developers and Operators.
www.hotour.de
INTERCONTINENTAL HOTELS GROUP
(IHG) is a global organisation with nine
hotel brands including InterContinental
Hotels & Resorts, Hotel Indigo, Crowne
Plaza Hotels & Resorts, Holiday Inn Hotels
and Resorts, Holiday Inn Express, Staybridge Suites, Candlewood Suites, as well
as our two newest brands, EVEN Hotels
and HUALUXE Hotels & Resorts. IHG also
manages Priority Club Rewards, the world‘s
first and largest hotel loyalty programme
with over 67 million members worldwide.
IHG franchises, leases, manages or owns
over 4,500 hotels and more than
666,000 guest rooms in nearly 100 countries and territories. With more than 1,000
hotels in its development pipeline, IHG
expects to recruit around 90,000 people
into additional roles across its estate over
the next few years.
InterContinental Hotels Group PLC is the
Group‘s holding company and is incorporated in Great Britain and registered in
England and Wales.
www.ichotelsgroup.com
October 2012
Stand Talk 2011:
5 minutes plain
talking with
Michael Muecke,
Accor.
JUNG & SCHLEICHER RECHTSANWAELTE: Located at the heart of Berlin,
Jung & Schleicher (J&S) provide comprehensive legal advice to national and international clients in all areas of business law
and particularly in real estate law – always
focused on performance and solutions. The
company offers individual and personal
service at the highest professional standards.
J&S is specialized on complex and interdisciplinary issues of real estate, hotel,
banking, finance, corporate and commercial law and is well experienced in all
kinds of national and cross-border transactions. In the last few years alone, we successfully accompanied funds and financing of more than – 2 billion, complex real
estate transactions and developments of
more than – 3,5 billion (more than –
2 billion in hotel and management properties) and M & A/corporate-structuring of
more than – 1.5 billion.
In addition to such major project work, J&S
advises its clients in all questions of their
day-to-day business operations such as
developing and drafting contractual concepts (management, lease, franchise, building, service, licensing, cooperation, purchase, loan or outsourcing agreements),
enforcing damage claims, achieving settlements, handling public law and license
requirements with the competent authorities,
negotiating loans and mortgages, etc.
Depending on the client’s wishes all correspondence and documents are provided in
bilingual versions or English only.
Each year J&S represent clients in more
than 250 regional and appeal court proceedings nationwide. Clients describe our
success quote as outstanding. J&S has also
been acting in arbitration proceedings
before the International Court of Arbitration.
www.js-law.de
KOHL & PARTNER: Clients of the leading
tourism consulting company in Austria are
famous tourism destinations, leading companies, public authorities, and well-known
investors. The firm with more than 30 years
of experience in the field of tourism stands
for “quality in tourism”. The company is
being developed and managed according
to the EFQM Model for Business Excellence
and won the “Austrian Quality Award” (a
contest of the Austrian Ministry of Economics) for SMEs in Austria. Furthermore Kohl &
Partner is an affiliate member of the UN
World Tourism Organization and works in
accordance with international consulting
standards. Beside the German speaking
markets Kohl & Partner puts a special focus
on Central, Eastern and Southeastern
Europe. Currently, there are 12 offices in
nine countries (Austria, Germany, Italy,
Switzerland, Hungary, Romania, Bulgaria,
Macedonia and Albania). The core business areas of Kohl & Partner are hotels &
restaurants, destinations, touristic infrastructure, seminars & trainings. www.kohl.at
October 2012
Left:
Sven Buettner
Hospitality catering at Expo Real
The Young Wild ones with culinary tickles
Munich. Hotel managers love to enjoy – this is also the case at
Expo Real. For the fourth time, the guests of the networking
event “BRICKS & BRAINS” will be able to feast on the exquisite
finger food created by Sven Buettner from Kempinski Hotel Vier
Jahreszeiten in Munich. However, it will be a premiere for the
new catering team of Rilano No.6 Lenbach Palais from Munich
under the new chef Steffen Sonnenwald who will be spoiling the
booth partners and their guests at the joint stand “World of
Hospitality”. In the case of both maîtres, you can still distinguish
the culinary past of the “Junge Wilde” – the young wild ones.
His private favourite dish is still his wife‘s sauerbraten done
Rhenish style, Sven Buettner confesses – in his job, however,
he has let loose and created the most extraordinary dishes
like lobster with suckling pig, following the motto “switch off
the brain and listen solely to your taste buds.” This was typical for the representatives of the chefs‘ association “Die Jungen Wilden” (the young wild ones), to which Sven Buettner
was admitted in 1999.
Die Jungen Wilden were initiated only two years before as
an association of junior chefs following the motto “cooking is
a religion for us.” They were committed to turning down the
rules of traditional gastronomy in favour of young and avantgarde cooking and gastronomic concepts. In 2004, the
group dissolved; but their positive image is still aglow up to
the present day.
Today, Sven Buettner would no longer describe his culinary
style as wild but rather as usually creative in the Hotel Vier
Jahreszeiten Kempinski. Whether parmesan crème brûlée or
frothy truffle potatoes, every single canapé melts in your mouth.
In 2009, Sven Buettner from Schleswig-Holstein, who worked at
Hotel Atlantic Kempinski Hamburg at that time, joined the chef‘s
team at Maximilianstrasse in Munich.
For the 4th time, Kempinski Hotels & Resorts and Kempinski
Hotel Vier Jahreszeiten are the main sponsors of the top-class
networking event “Bricks & Brains”, to which HospitalityInside
and Messe Muechen have sent out invitations. 150 carefully
selected guests will be able to savour extraordinary creations
once again, the superb quality of which will not suffer from
LINDNER HOTELS & RESORTS: Innovative
hotel concepts, multi-media solutions and a
variety of spa, sports and golf opportunities
are the features of the 34 4-star Lindner
Hotels & Resorts based in Duesseldorf. Still
looking for real estates in the field of constructing, managing, lease and franchising
in Europe. Focus of the independent con-
Right:
Steffen
Sonnenwald
the logistic challenges of trade fair catering: the chefs will put
the final touches on the finger food in a mobile kitchen area.
Under Sven Buettner, Hotel Vier Jahreszeiten has consistently
expanded its external catering services. Its references include premium events at Hugo Boss, Hermès, Calvin Klein and Bulgari.
Lenbach impressions at the stand ”World of Hospitality“
Steffen Sonnenwald was a founding member of “Die Jungen
Wilden” besides renowned colleagues like Holger Stromberg
or Stefan Marquard. The variety of aromas is still an incentive
for him. “I want to have an inspirational cuisine, a natural,
straightforward Mediterranean cuisine,” he says, in view of
the new Rilano No.6 Lenbach Palais in Munich, which will
officially open on October 12 – directly after the Expo Real.
Close to Stachus, in the historic walls of the Bernheimer Palais
from the late 19th century, Steffen Sonnenwald, who originally
comes from Munich, wants to leave his culinary mark: with a
new gastro concept between fine dining and high-class chill
out created by means of a DJ and dance floor after 11 pm.
From October onwards, the city‘s trendy meeting spot will be the
first – gigantic – F&B outlet belonging to the young Rilano
Group, which has been operating cultivated 4-star business
hotels under the Rilano brand and smart design hotels under the
24/7 brand so far. As the Lenbach will become the 6th Rilano
business, the number has been included in the new name.
With the Lenbach restaurant (200 seats), the bar (160 seats),
the historic hall (260 seats) and 150 seats on the terrace,
Steffen Sonnenwald and the bar team of Anton Mueller will
be able to prove their ability in juggling fine dining and finger food, à la carte and quick snacks, a bar business and
catering under one roof. Sonnenwald is well acquainted with
the hotel industry and gastronomy: among others, he worked
at the restaurants Austernkeller and Le Gourmet in Munich, in
the Romantik Hotel Hof Zur Linde in Muenster and in the
Schlosshotel Oberstotzingen. // map
sulting subsidiary Lindner Hotels Real Estate
GmbH is providing international hospitality
& real estate solutions. It includes consulting, conception and realisation of hotel
projects, investment consulting and brokerage for external clients and internal objects.
The newest subsidiary me and all hotels
GmbH combines high-tech and first-class
equipment. Core feature is the community
lounge with five theme zones. Search criteria for buildings: lively hearts of city centers, appropriate infrastructure for daily
needs, real estate buildings up to 8,000 sq.m.
GFA. www.lindner.de and www.lhre.de
LOUVRE HOTELS GROUP is positioned
among the World’s Top 10, with more than
1,090 hotels, 87,000 rooms, 6 brands
15
and 55,000 clients/a day. Constantly
evolving, the group stands out in the market
by its history, where prosperous development is combined with sustainable growth.
Including a strategy founded upon the
dynamism and the ambition of all our
employees.
Established in over 40 countries, developing brands abroad with help from local
partners who know the local hotel and realestate market inside out. What makes the
group unique and distinctive is the range of
different brands that it is made of.
Every one of those 6 brands ranging from
1 to 5 stars, seeks to shake up the standards of its category. And they all have
something in common: a determination to
innovate and a challenger’s state of mind.
The 6 brands : Premiere Classe – Campanile – Kyriad – Tulip Inn – Golden Tulip –
Royal Tulip. www.louvre-hotels.com
16
RILANO HOTELS & RESORTS: The Rilano
Group is a hotel management and consulting company situated in Kleve, Germany.
Founded by private property owners and
managers with many years of international
experience in the hotel industry, the Rilano
Group GmbH benefits from the entire value
chain of hotels. Banks, investment funds
and international hotel chains belong to
their clients such as institutional investors
and property owners. The business areas
are project development, acquisition of
existing hotels, operational and strategic
hotel management, design and planning
as well as the operation of new hotel properties. Competence, responsibility and passion for outstanding service are the company‘s values.
The objectives of Rilano Hotels & Resorts is
a sustainable economic and value-based
management of hotels with strong focus on
further expansion of first-class hotels, which
fulfill the needs and requirements of business and leisure travelers.
The portfolio of Rilano Hotels & Resorts
includes three to four star brands as The
Rilano Hotel, a first class product with full
restaurant and conference rooms, the
design and limited service brand Rilano
Stand Talk 2011:
5 minutes plain talking
with Christian Windfuhr,
Grand City.
24/7 Hotel and Rilano Resort. The actual
hotel portfolio contains: The Rilano Hotel
Munich, the Rilano 24/7 Hotel Munich,
the Rilano 24/7 Hotel Munich City, The
Rilano Hotel Hamburg, the Rilano 24/7
Hotel Wolfenbuettel and the Rilano Resort
Kitzbueheler Alps.
In spring 2013, the actual The Rilano Hotel
Cleve is reopened at a new location. The
hotel is at the moment under construction.
Latest move of the young and innovative
hotel group: From October 12th, the Rilano
No.6 Lenbach Palais completes the portfolio as the first independent restaurant under
the Rilano flag. www.rilano.com
SIEMENS FINANCIAL SERVICES (SFS)
enables dedicated finance packages for
verticals: Siemens AG (SAG) has identified
vertical markets as growth engines for
cross-sectoral business opportunities. In
aligning world-class infrastructural solutions
along vertical market needs all necessary
organizational efforts have been taken to
provide the best possible solutions and
services for the named customer portfolio.
Part of this unique initiative SAG put SFS in
place to support and facilitate this growth
initiative providing tailor-made finance
packages.
Siemens Financial Services steps into the
hospitality and entertainment market
(H&E): Increased competitive pressure both
from within and outside the traditional
hospitality & entertainment industry and
October 2012
changing customer expectations drive the
need for new services, solutions and
finance packages. As a result, Siemens
understand, that H&E players are faced
with the challenge of reconciling the necessary short-term investments in infrastructure, new technologies and brand standards with their long term business goals in
terms of profitability, business continuity,
operational efficiency, sustainability and
investor value creation.
Siemens as trusted worldwide partner with
the design, engineering, project management and implementation of innovative solutions, can help address the challenges in
the fields of energy efficiency, safety and
security, guest comfort and cost management, for which Siemens, jointly with Siemens Financial Services, aim to combine
these advanced technologies with a comprehensive service portfolio and a affordable finance solution, to ensure high system
availability and reliability, facilitating seamless system upgrades and expansions – for
long term investment protection.
http://finance.siemens.com/
financialservices/uk/Pages/home.aspx
TREUGAST Unternehmensberatungsgesellschaft mbH, founded 1985 in Munich,
is a member of Treugast Solutions Group
and belongs to the leading consulting
companies in hospitality industry in
Europe. Years of experience and expertise
of more than 30 Consultants and 600
employees worldwide in Treugast
Unternehmensberatung, Treugast Hotellerie
and Treugast International Institute provide
decision-makers with the planning reliability, which is essential for the development
and execution of projects within the tourism environment.
The Treugast portfolio includes:
• Around 120 consulting projects per year,
among others in fields like development
of tourism destination, site surveys, feasibility studies, operational analyses,
expertises, coaching & controlling as
well as marketing & sales;
• Since 1995 more than 120 self-operated hotels in terms of Pre-OpeningManagement, Interim Management,
October 2012
Turn-Around-Management as well as
Operational Asset Management;
• Scientific activities of Treugast International Institute, among others publisher of
several industry-relevant publications like
Hotel Investment Ranking Germany and
Austria, Hospitality Trends, Business Comparison Hospitality and Gastronomy as
well as Hotel Location Attractions Index.
The American Academy of Hospitality Sciences bestowed Treugast Solutions Group
as the first consulting company worldwide
with the Star Diamond Award. Furthermore, Treugast was distinguished with the
Special Award “Hotelier des Jahres
2011” (Hotelier of the Year 2011).
Among several other international activities
Treugast conducted hotel projects in Georgia as well, which ensures that knowledge
on the specific hotel market can be provided. www.treugast.com
WTSH – BUSINESS DEVELOPMENT AND
TECHNOLOGY TRANSFER CORPORATION OF SCHLESWIG-HOLSTEIN / Investment Management hotel projects: The main
point of contact for hotel operators, investors, local authorities and project developers is the Investment Management for Hotel
Projects team at the Business Development
and Technology Transfer Corporation of
Schleswig-Holstein (WTSH).
Through customised services offered free of
charge we provide qualified support in
every project development phase, e.g.
in finding the right location, applying for
subsidies or looking for project partners.
We offer sound and specific market and
locational knowledge plus details of interesting development sites; we open door to
the state‘s ministries and decision-makers;
and we have a broad-based network of
contacts in the hotel industry.
www.wtsh.de/hotel
Advertisement
Current Hotel Projects
BAYERSTRASSE MUNICH
QUARTIER D³ DÜSSELDORF
Bayerische Hausbau:
Extensive expertise for
successful hotel concepts.
The completion of a new hotel – situated close to the central station – is scheduled for early 2015.
MILANEO STUTTGART
The completion of the hotel in the vibrant new urban
district in the heart of Stuttgart is planned for 2015.
Telephone
+49 89 9238-04
www.hausbau.de
The attractive new development in the north of Düsseldorf
will include a hotel in addition to offices and apartments.
BIKINI BERLIN
25hours, a design hotel in «Urban Jungle» style, will open
between the Berlin Zoo and Ku’Damm in 2013.
As a traditional property developer our core competencies include the planning, construction and development of hotel properties. What began more than
five decades ago with the construction of the first
hotel in Munich, we continue today with new successful hotel concepts throughout Germany: from careful
selection of the site to individual project development
and on-schedule completion. The key to lasting success
and increasing value of the property lies, in no small
measure, in the choice of a suitable operator, whom
we carefully select through our long-standing contacts
with the national and international hotel industry.
Our current hotel projects in Munich, Berlin, Düsseldorf and Stuttgart are testimony to our high-quality
standards.
Visit us at EXPO REAL from 8 to 10 October 2012:
Stand 214/Hall A1
17
October 2012
& BRA NS
& BRA NS
A hospitalityInside Network Event hosted by Expo Real Munich
A hospitalityInside Network Event hosted by Expo Real Munich
Monday night: Get together
Munich (October 8, 2012). Relaxed talks in a familiar atmosphere – the top management of the hotel industry
and investment scene meets at the fourth „BRICKS & BRAINS“.
18
L
ike in the previous years, hotel operators, investors, bankers
and project developers will meet on Monday evening of the
trade show. Traditionally, sponsors, network partners and participants of the “Hospitality Industry Dialog” will make up half of
all participants. The remaining seats will be reserved for new
guests. This event is intentionally “by invitation only” in order to
enable top decision makers a few hours of efficient talks despite
the relaxed ambience.
The number of seats is limited, only invited guests with confirmed
registrations will be admitted. Accompanying persons will not be
allowed to join the round.
Impressions of BRICKS & BRAINS 2011.
October 2012
4th BRICKS & BRAINS
The top-notch networking event of the hotel
industry will take place for the fourth time at
EXPO REAL. The Fondara group of companies has become part of the phalanx of
sponsors. Fondara will be contributing substantially to the supply of overnight stays at
the trade show with the opening of Riem
Hotels in Munich next year. The company
invests into a complex of H2 and Ramada
Hotel scheduled to open before EXPO REAL
2013. For Philipp Hlousek, Managing
Director of Fondara, this was reason
enough to show colours at this event.
Just as in the last few years, “Platinum Sponsor” Kempinski Hotels & Resorts promises a
culinary highlight in the evening: Hotel Vier
Jahreszeiten Munich and its catering team
will spoil the guests with a creative flying
buffet for the fourth time in a row. It is
already foreseeable that the team of General Manager Axel Ludwig will be a success factor that evening.
Among the present “Gold Sponsors”, the
following will be present once again: hotel
group Choice Hotels Europe, Solutions
Holding with Treugast founder Stephan
Gerhard at its head, RMDS Hotel Development corporation, Reutlingen with architect
Cornelia Markus-Diedenhofen, and bbgCONSULTING from Duesseldorf with the
two Managing Directors Tina Froboese and
Karlheinz Kreuzig.
As bbg-Consulting has also become a
sponsor for the second time, the “hospita
lityInside Networking Society” at BRICKS &
BRAINS increases to five members. Without
these strategic partnerships the development of the hospitality network at the fair
would not become reality.
Again, the event is organized by MMG
Event, the event agency of Messe Munich.
SAVE THE DATE 2013
Would you like to become a partner for
BRICKS & BRANS 2013 and benefit from
the top contacts at this event? Please, send
an eMail to [email protected].
YOU ARE a hotel operator, investor, financing expert or hotel developer and like to be
a guest of BRICKS & BRAINS 2013?
Please, send your request on time, including your contact data to service@hospita
lityInside.com.
EXPO REAL 2013 will take place from Monday to Wednesday, 7-9 October 2013.
Consequently, BRICKS & BRAINS 2013 will
take place on Monday, 7 October 2013.
SAVE THE DATE!
THANK YOU VERY MUCH
To all our partners for their valuabe
BRICKS & BRAINS support in 2012!
KEMPINSKI HOTELS & RESORTS, Hoteliers since 1897, are one of the leading luxury hotel groups of the world. Originally German, the collection today consists of 73 historical Grand Hotels, business hotels and resorts in 31 countries. bbg-CONSULTING,
founded in 1962 has been Europe‘s first specialized consulting firm for hotels, restaurants and catering services. Based on 50
years of experience, one of their “brands” is the benchmark “Betriebsvergleich Hotellerie & Gastronomie Deutschland”, a comparison between hotels and restaurants in Germany, published 44 years ago for the first time. CHOICE HOTELS EUROPE represents
about 500 hotels of the group in Europe under the Comfort, Quality and Clarion brands of which more than 70 hotels are located
in Germany, Italy, Switzerland and the Czech Republic. With more than 6,200 hotels and 495,000 rooms, Choice Hotels International is the world‘s biggest franchisor. RIEM HOTELS MUENCHEN will open their doors next year right opposite the entrance of
the Munich fairground. The hotels belong to Fondara company group developing, building and managing real estate projects in
retail, hotel and commercial real estate. RMDS Hotel Development stands for a network of hotel experts who construct, care for and
furnish hotel projects from a single source. The experts behind are Cornelia Markus-Diedenhofen from Reutlingen, a graduate
engineer having received several awards in the last years, the architects and city planners of Buero Riehle + Assoziierte in Reutlingen, and Scholze Gruppe with its engineers and consultants specialised in building services engineering and working worldwide.
SOLUTIONS HOLDING encompasses all subsidiaries and affiliates of Treugast founder Prof. Stephan Gerhard. Treugast Solutions
Group is the core of the holding. Founded as Treugast Consulting in Munich in 1985, the company is one of the leading consulting
firms in the European hotel industry, in gastronomy, tourism and leisure. Except for consulting projects, the group also runs selfoperated hotels in terms of Interim, Turn Around- and Operational Asset Management.
19
October 2012
More hotels than demand: Only economy and politics are able to change this
Caught in the downward maelstrom
London. In many of the major economies over the past five years, the rate of growth in hotel supply has exceeded
the rate of growth in hotel demand. The resulting low levels of room occupancy are jeopardising returns on investment,
a situation that cannot be maintained for much longer. Paul Slattery, Director of Otus & Co Advisory, a London
based investment bank, specialising in hotel chain transactions and advising hotel chains and investors on long-term
strategies, has to cope with these issues on a daily basis. In his analysis, if investors in hotel real estate and hotel
chains had paid enough attention to the economic structure of countries and to the economic policies pursued by
governments then the excess room supply would not have been an issue.
I
20
n the second edition of his book “The Economic Ascent of the Hotel Business”,
which was published in March, Slattery
analyses the web of relationships between
economies and the hotel business. In
today’s interview, he traces the developments in hotel demand and supply in
France, Germany and the UK, based data
from the Otus Hotel Brands Database. Concerning this subject, Slattery will give the
key note in the discussion about financing
at Expo Real’s hotel conference “Hospitality
Industry Dialogue” on October 8, 2012, in
Munich. Extracts of the interview.
What changes occurred in hotel demand
in France, Germany and the UK since the
start of the economic traumas?
Paul Slattery: First let me compare the hotel demands of the years 2011 and
2006. By the end of 2011 in France,
Germany and the UK the total volume of
room nights sold had nearly recovered to
the volumes achieved at the end of 2006,
the last full year before the economic
traumas began.
Over the same period, hotel chains in
each country increased their share of demand at the expense of unaffiliated hotels,
whose share declined. Of the four sources
of demand – domestic business demand,
domestic leisure demand, foreign business
demand and foreign leisure demand –
each source in each country declined over
the period except for foreign business demand in the UK, which was maintained by
organizational activity connected with the
London Olympics in 2012.
In which markets did hotel investors and
hotel operators primarily believe?
Paul Slattery: In general, chain rooms supply grew while unaffiliated supply declined.
Broken down to the individual markets,
over the 5 year period of economic trauma
we saw hotel chains in France expanding
room stock at an average annual rate of
1.8%, chains in Germany expanding at an
average annual rate of 4.0% and in the UK
by 3.7% producing the supply increases
depicted in Table 4:
Over the period, the faster growth in rooms
supply than in demand has produced
decline in room occupancy in Germany and
the UK and flat occupancy in France. Chain
room occupancy also declined in Germany
and the UK and increased in France. The
real problem is in the unaffiliated sector
where room supply and demand declined
as also did room occupancy.
Which conclusion do you draw from
these developments?
Paul Slattery: There is too much supply for
the available demand.
Which factors will stimulate hotel supply
until 2020?
Paul Slattery: Economic structure and economic policies! And here we talk about
severe shifts in the significance of economic segments. There is a causal relationship between economic structure, economic policies, hotel demand and hotel supply in every economy. In an idealised
world, economic structure is the fundamental determinant of the volume of hotel
demand. Economic policies control the
pattern of hotel demand, while the volume
and pattern of hotel supply in any econo-
October 2012
Dear Readers,
In this SPECIAL, we focus on the hotel industry at EXPO REAL 2012
and on the hot topics of the industry. Current topics of the fair are
part of this magazine. Also, you will find younger articles and excerpts
from the online trade magazine www.hospitalityInside.com.
my reflect the prevailing hotel demand.
A broad picture of the different economic
structures of France, Germany and the UK
is seen in Table 9 (see left page).
Service businesses and experience businesses yield the highest domestic business
demand into hotels – agriculture and industry yield the lowest. Thus, the lower proportion of employment in the high yielding segments in France and Germany is reflected
in the lower volume of domestic business
demand and domestic leisure demand into
hotels compared with the UK.
The shift in the significance of economic
segments is an outcome of change in economic policies. The BRIC economies (Brasil,
Russia, India, China) are developing their
economic structure from agriculture to industry. This has required the building of more
hotels, but the significance of hotels to the
Paul Slattery is a Director of Otus & Co Ltd
corporate financial and strategic advisors to
the hospitality and travel business. Previously,
he worked for Dresdner Kleinwort Wasserstein
for 15 years until 2002, establishing its reputation as one of the market leaders in hospitality
stockbroking and investment banking. Prior to
that he was an academic at the University of
Huddersfield
BRIC economies is minor. The ratio of hotel
rooms per 1,000 citizens in the BRIC economies is around 1 compared with
Germany’s 6.3 and the UK’s 8.4.
The greater reliance of Germany than the
UK on the industrial segment goes a long
way to explain the higher rooms supply ratio, the higher rooms concentration, the higher the volume of domestic business demand and the higher the volume of domestic leisure demand in the UK.
For the past 60 years, the default economic
policy in Europe to deal with unemployment
has been to expand the public services
segment, which now accounts for 10 to
15% of hotel demand across Europe. Now
that public services are being shrunk as a
matter of economic policy, it is a threat to
hotel demand.
How can you balance these threats?
Paul Slattery: The fundamental economic
problem to be solved is high and rising unemployment. In the case of France and
Germany and other Eurozone economies,
the lower yielding segments – agriculture
and industry – cannot create enough new
jobs to solve the problem.
The realistic option is to pursue economic
policies to expand the service business segment: communications, financial services,
personal services, professional services and
retailing. A larger and growing service
business segment will yield much higher volumes of domestic business and domestic
leisure demand into Eurozone hotels as it
has done in the US and the UK. The achievement of this transition will neither be easy
nor fast, but no other economic policy initiative will reduce unemployment enough
and grow domestic hotel demand enough.
What will happen if this policy change
will not work?
Paul Slattery: Without policy change,
growth in hotel demand will be slow, at
best. If the rate of new supply is
maintained, the performance of hotels and
the return on hotel investment will plummet.
For hotel chains and investors to survive,
the chains will need to take even more
demand from unaffiliated hotels, banks will
need to cut-off unaffiliated hotels from credit
and more heavily constrain the access
to credit for chains and hotel real estate
investors.
However, it is not all bad news. For the first
time, most of the world economies, simultaneously need to shift the structure of their
economies to the next stage. The very
good news is that when the appropriate
economic policies are enacted and the
structure of the economies shifts forward,
there will be an explosion of hotel demand
from each of the four sources, globally.
The interview was conducted by
Maria Puetz-Willems.
21
October 2012
10 consulting companies: Financing terms increasingly drastic
Rotten conditions
Augsburg. The banks are no longer justifying their existence by financing projects. They are continually adverse to risk
and with this, are strangling an increasing amount of hotel projects. The equity ratio rises and rises, the lease leaves
no opportunity to management and franchise. The projects that still seek financing are squeezed into a simple model
of conditions. While central European financing suffers from Basel III, the Euro discussion brings international investors
to hesitation. hospitalityInside.com has questioned ten well-known consulting and broker companies on how they see
the current financing situation in the central European hotel industry. Seldom are the appraisals of experts so closely
together – and laying negatively in this trend.
T
he following companies have taken part
in the survey:
22
• M
arkus Beike, Managing Director,
Christie + Co., Berlin
• Tina Froboese, Managing Director,
bbg-Consulting, Dusseldorf
• Prof. Stephan Gerhard, Managing Partner, Treugast Solutions Group, Munich
• Martina Fidlschuster, Managing Director,
Hotour Hotel Consulting, Frankfurt
• André Gribi, Managing Partner, Kohl &
Partner, Vienna / Villach
• Matthias Hautli, Consultant, Kohl & P
artner, Vienna
• Olivia Kaussen, Senior Director/Head
of Hotels Germany & CEE, Munich
• Ursula Kriegl, Manager, Jones Lang
LaSalle Hotels Deutschland, Munich
• Max Luscher, Managing Director
Corporate Finance Real Estate, KPMG,
Frankfurt
• Christian Walter, Managing Director,
PKF hotelexperts, Vienna
And are here their
answers to 6 questions:
1. How strongly do the political Euro
zone discussions burden your talks dur
ing negotiations?
Ursula Kriegl: On the one hand, negatively
uncertainties concerning operational business development, restraint from investors,
banks and operators, on the other hand,
positively (perception of real estate as a relatively secure investment).
Markus Beike: Immensely – the restrictive
financing policy that is marked by lower
lending values and a slowed credit verification seems an indication of the very low
transaction volume in comparison to last
year.
Olivia Kaussen: Particularly with the international partners, e.g., from Asia or America, we note that some investors first wait
for how the Euro zone discussion develops
before they consider further acquisitions.
Besides, with some international investors,
a delay in the transaction process is perceptible on account of the additional complexity or the difficultly calculable risk. In
addition, some currency risks slam at the
revenue, which leads to price reductions.
But all in all, it can be said that Germany
still counts as one of the most popular hotel
investment countries with the Euro zone and
is much less troubled by this subject than
some southern European countries.
Martina Fidlschuster: Bricks and mortar
help here! The more unstable the Euro
becomes and the higher the fear of inflation
is, the more investors flee into real estate.
Stephan Gerhard: It is odd really, but the
political Euro zone and Euro crisis discussion has played no, or only little, role in
financing negotiations with banks.
Tina Froboese: The Euro crisis is little
addressed as a central theme during negotiations. Rather, the negotiations are burdened by the subject of Basel III that is
increasing paralyzing financing readiness.
In the course of the company equity securitisation, the banks are adjusting their commercial strategies in such a manner that the
industry must also struggle with the prolongation of the course. As a result, there is a
great amount of reduction in hotel exposure
that does not come to pass, even with
respectable projects.
Matthias Hautli on Austria: Uncertainty
among banks is increasing. Restrictive
financing directives for hotel projects are
being tightened even further. There is concern that certain important demand markets
could be lost (e.g. Spain or Italy). There is
another large question mark over interest
rate developments.
André Gribi on Switzerland: For Switzerland, the strong Swiss franc obviously
weighs on negotiations. In particular for
investors from outside Europe, Switzerland
has become even more expensive and
demand from the Eurozone is low. Investors
from Asia, Russia and the Arabic countries
have been the main prospective investors in
this market over recent months.
TREND:
NEGATIVE
2. Which hotel properties are experien
cing stronger demand from investors,
which saw such high demand in previous
years?
Markus Beike: The interest tends to be
focused on lower volume properties (Euro
10-20 million). Lower loan-to-value ratios
require investors to commit more equity. The
question of finance therefore limits demand
for higher volume properties. Demand focuses
on operator-free (cheaper) hotels and hotel
investments (hotel + lease contract). Locations
remain A and B hotel markets. A run on C
markets has not occurred up to now.
Tina Froboese: At present, interest is
increasingly focused on budget products or
October 2012
the luxury hotel industry. Products in the midscale segment are only interesting for investors where these have real unique selling
points and the potential to be positioned as
a niche product. In certain locations, we
are also seeing a considerable increase in
demand for boarding houses. A strong
brand is becoming ever more important to
investors than it was in the past. This brand
should either have high international visibility or have a very strong national presence.
Christian Walter: Trading assets remain very
much in demand. Projects are currently difficult to market. Classic institutional investors
are looking for budget and midscale hotels in
large European cities. Luxury hotels are especially popular as a means of securely parking
capital (current example: Ritz-Carlton Vienna/
investors from Kazakhstan). And then there
are of course the bargain hunters looking for
run-down hotel properties which can be renovated and repositioned with a new operator
and subsequently sold on at profit.
Stephan Gerhard: Real “bargains” are
again very much in demand, in particular
owner-operator hotels. Otherwise, the
former focus on “only 4 or 5-star hotels” or
“only budget” is no longer present. Security, returns and sustainability are in the foreground of thinking now.
Martina Fidlschuster: Foreign (and) private
investors continue to prefer trophy properties, those here have thrown themselves
wholeheartedly on the budget waggon.
The trend there continues to strengthen.
Matthias Hautli on Austria: The focus is
clearly on city real estate. Demand centres
primarily on 3 and 4-star hotels in Vienna.
Larger deals have, however, up to now
been absent. Russian investors have caused
a stir this year by buying up three historic
hotels in Obergurgl and Soelden within a
short period of time. In Tyrol, only Kitzbuehel has been of interest up to now. These
transactions clearly show which investor
groups are currently active (mostly those
with high levels of equity to invest).
André Gribi on Switzerland: The focus
remains, as has long since been the case,
on city real estate. Zurich, Geneva and
Basel are the most popular cities. A few
exceptions are formed by large investments
by foreign investors in rural areas such as
Andermatt and Buergenstock. Otherwise,
there is practically no demand for resorts.
TREND:
STABLE
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23
3. What are the usual investment sums/
ranges at present, what was usual in pre
vious years?
24
Olivia Kaussen: Portfolio transactions have
become much rarer. There are portfolios on
the market, but these are difficult to finance.
The expectations of the vendor and the
offers made by investors are often some distance apart. The focus of most institutional
investors is on single assets of between 20
and 50 million Euro, as in previous years.
Only a few have the requisite diversity in
their hotel holdings to be able to cushion
any possible cluster formation on transactions of over Euro 50 million.
Financing banks have also reduced their
financing caps so that many investors
which would like to invest in larger assets
have their hands tied. Compared to previous years, it’s obvious that there are no
investments of over 100 million Euro. In
general, volume has tended to fall, though
the number of transactions has remained
the same.
Ursula Kriegl: The focus remains on hotels
with transaction volumes of 20 to 50 million Euro. Large volume transactions (over
50 million Euro) have been absent this year
to date. There have, however, been relatively many transactions of between 1.5
and 5 million Euro (over 40% of all individual transactions) led by high net worth individuals (HNWI) or private equity companies in the first half-year.
Max Luscher: Tends to be small volume
investments. The environment for owneroperator transactions is becoming increasingly difficult.
Stephan Gerhard: In previous years, we
saw transactions of between 5 and 20 million Euro, today there are opportunities for
up to 5 million Euro and properties/
projects from 20 million Euro.
Matthias Hautli on Austria: According to
current market reports, the total transaction
volume in the Austrian hotel investment market (January to June 2012) stands at 130
million Euro, slightly below the level from
the previous year. Transactions are primarily
individual transactions in the 3 or 4-star
segment.
TREND:
NEGATIVE
4. How are banks behaving at present?
What sort of finance is being granted,
and what is not being granted?
Stephan Gerhard: Banks remain (or are
again) reticent. Equity requirements have
increased to up to 50%. Hotels are, however, still being financed. It is clear though
that banks with sizeable hotel finance
assets in their portfolio don’t want to
expand this area further. On the other
hand, there are other banks which are
returning to the hotel market and which
therefore bring balance.
Martina Fidlschuster: Banks able to refinance through Pfandbriefe are more easily
approached than ones that don’t. In today’s
market environment, banks tend to require
more equity from the borrower than to
cover risk by higher interest rates.
Ursula Kriegl: Banks remain cautious but
there are some that continue to provide
hotel finance. The “simpler” (existing property, lease contract) the finance application,
the better. Management contracts and
projects remain difficult.
Tina Froboese: New projects are larger
investment sums are difficult. Depending on
location, there is a general willingness to
finance revamps and further development
of existing properties in the private hotel
sector. The requirement here is an excellent
track record of the hotelier which, in the
best case, is supported by a sound successor agreement.
Christian Walter: Banks are happy when
the hotel project includes elements which
can be sold as residential property - that is
hotel plus serviced residences. In the luxury
October 2012
sector, this is already on the agenda (examples from Vienna: Four Seasons, Kempinski). In certain cases, sales contracts with
the subsequent users of the serviced residences can be included as equity.
These so-called non-disturbance agreements
are not exactly welcomed by the banks
though. This has caused many a finance
application to fail. At present, they are
looking for lease or management contracts
with (at least!) owner’s priority return, very
good location and a known brand. This is
nothing new, but bank risk managers are
now focussing intensively on these
attributes.
Matthias Hautli on Austria: Banks’ behaviour with respect to hotel finance remains
very restrictive. The equity ratios required
make finance for hotel projects and also for
some hotel refurbishments ever more difficult. Risk aversion is high. Only secure
projects in prime locations with strong operators are being financed. Pure management contracts without collateral are difficult
to get through. There are high premiums
over Euribor.
André Gribi on Switzerland: Banks have
not changed their earnings-orientated
stance over recent years. Good projects
require at least 40% equity.
TREND:
NEGATIVE
5. In the past years, there has been more
talk about franchising. Does this type of
agreement have a chance when it comes
to financing?
Olivia Kaussen: A franchising model could
definitely be an alternative compared to
management agreements. Major hotel companies like Event, Westmont, and Foremost
can keep up with several nameable hotel
chains regarding the number of hotels, and
they have a good standing among banks.
In addition, there are numerous successful
October 2012
From left:
Markus Beike, Martina Fidlschuster,
Tina Froboese, Stephan Gerhard,
André Gribi, Matthias Hautli,
Olivia Kaussen, Ursula Kriegl,
Max Luscher, Christian Walter
small lessees collaborating with major
brands such as the Success group. However, less experienced small franchisees
have a hard time trying to receive funding.
A good credit rating and a positive track
record of both lease company and franchisor are particularly important – unless a
franchisor provides additional securities.
The latter, however, is almost never the
case.
Stephan Gerhard: Franchising is a good
thing as long as the actual contractual partner/lessee provides a satisfactory credit rating. One could almost say that franchise
models get financing in cases when the
brand is of no significant importance and
financing would also occur under a weaker
brand keeping the same operator.
Tina Froboese: Franchising has a chance
of being financed as soon as a lease
agreement is involved. This model also
requires the lessee to have a good credit
rating, which is supported by hotel companies through contributions to investment
costs or guarantees with respect to individual projects. These are rather rare exceptions.
Markus Beike: Yes, franchising is increasingly being discussed, but mostly in connection with a lease solution rather than in a triangle of contractual partners with an international hotel brand standing in the focus.
In the end, it is all about the lessee’s credit
rating.
André Gribi about Switzerland: Basically,
franchising a good brand is generally considered positive by the banks. They expect
increasing revenues from it as well as a certain security. We think this is in fact wrong.
Franchising means more costs, and the
added value needs to be proven first. In
addition, franchising practically doesn’t
allow any conclusions regarding the management, particularly concerning the middle-class segment.
TENDENCY:
NO CHANCES
6. How much equity capital do investors
have to contribute to projects up to 20
million Euro, up to 50 million Euro or
over 100 million Euro today?
Ursula Kriegl: For good projects, banks are
normally willing to finance 50 to 60 percent. Concerning larger projects starting
from 100 million Euro, financing is more
difficult.
Martina Fidlschuster: The requirement of
equity capital depends less on the amount
of investment and more on the risk evaluation of the bank and the bank’s experts,
who determine the property’s loan value
and who evaluate and assess the credit rating of the borrower and the hotel manager.
To put it simply: the use of equity capital
asked for by the banks has doubled since
the beginning of the financial crisis.
Stephan Gerhard: As far as we can see,
the share of equity capital is not implicitly
dependent on the investment volume, but
solely on the sustainability/stability/security
of the project.
Markus Beike: At the moment, the loan-tovalue ratios are 50 to 60 percent, independent of the volume. This means, the purchaser has to provide up to 50 percent
equity capital. Especially for deals with a
large volume, this is deadly – exceptions
prove the rule.
Max Luscher: The tendency goes towards
50 percent equity capital at least; exceptions prove the rule. Investment volumes of
more than 50 million are nearly impossible.
Christian Walter: This solely depends on
the location/market and the constellation of
the project. For projects (in Europe) up to
20 million, you might be able to manage
with 30 to 35 percent equity capital; for
projects up to 50 million it could be 35 to
40 percent; and for projects with an investment volume of more than 100 million
Euro, you have to expect more than 40
percent.
Tina Froboese: The equity capital rate
strongly depends on the individuality of the
concept and the total investment volume.
Products with a high standardisation level
and a less complex structure concerning
gastronomy and other services, e.g. budget
hotels, have a higher probability of financing. If financing is possible, it often includes
45 to 50 percent equity capital. In addition, the location is decisive, as always.
However, concerning the financing of more
complex and top-class projects, the banks
are very reluctant.
Matthias Hautli about Austria: A general
statement is not possible in this case.
Depending on the project, 20 to 50 percent equity capital could be necessary. In
cities, financing with less equity capital is
possible, generally speaking. Additional
factors of influence are the form of agreement with the operator (lease is clearly preferred), the securities of the owner or investor, the usability for alternative purposes,
and the fact whether the property transitions
into a funds financing at the start of the
operation and therefore only temporary
financing was necessary or not.
André Gribi about Switzerland: Basically
speaking, I would say it is between 40 and
50 percent, regardless of the volume. The
evaluation is important. For larger projects,
banks share the risk by founding a syndicate.
TENDENCY:
NEGATIVE
Summary: Maria Puetz-Willems
25
October 2012
26
German Ministry of Finance and EU introduce new regulations for funds
AIFM Directive: Spectacular development
Brussels. What a development! The German Federal Ministry of Finance presented the long-awaited draft for the
implementation of the European Directive on Alternative Investment Fund Managers (AIFM Directive). The draft caused
much concern among both open and closed-ended funds last week, which in the past have often provided hotel finan
ce. The fund industry has reached a turning point. The draft, if it were to be approved, would prohibit the inception of
new open-ended real estate funds. To date, though, not all points covered by the draft are clear. Many points
appear ill-tailored. The draft will therefore need considerable reshaping. And much is likely to be lost along the way.
A
ssociations need to submit their statements and suggestions for improvements by mid August, since time is
short. The deadline for implementation of
the directive into national law will expire on
22 July 2013. Just weeks ago, rules on the
distribution of funds were placed on a new
regulatory footing with the amendments to
investment legislation. July 2013 is still a
long way away. Though one thing is
already certain: Whatever the ultimate
shape the law takes, it will mean a perma-
nent change for the financial landscape.
The Ministry intends to place capital investment within a statutory framework, bringing
together existing statutes on investment with
future statutes for managers of alternative
investment funds. This also affects the hotel
industry, as an important buyer group could
break away in parts. What a spectacular
development!
The draft‘s arrival – it has been expected
for quite a long time – was in the end quite
sudden and much of its contents weren‘t
anticipated. It was setting down rules for
managers, as required by Brussels, the
draft also sets down rules for the products
themselves.
This is possible, though up to now Germany has taken a special approach. Berlin
might have seen this as necessary – as a
reaction to the various problems over recent
years with open-ended real estate funds (no
less than eleven such funds are currently in
liquidation) and the many scrapes experienced by closed-ended funds, for instance
October 2012
with their inclusion in foreign currency
denominated loans, mainly Japanese yen
or Swiss francs, or their high debt capital
components.
These problems have been overlooked by
Berlin. For this reason, Federal Finance
Minister Wolfgang Schaeuble has now set
about a full reform. The AIFM Directive
seems to have given him just the opportunity he was looking for to clean up the fund
landscape and, after all these years, make
it more transparent. This has been wellreceived by an electorate still reeling from
the financial crisis.
Who selects trustworthy
bidders and distributors?
Of course, regulation is the right basic concept, even if there are still mistakes and
dead ends such as the asset class definition
that is based on the past and according to
which only buildings, ships, airplanes, public private partnerships and renewable
energy facilities could be admitted to funds
in future.
The German Federal Ministry of Finance
(BMF) touched a sensitive nerve with its
draft paper. Sometimes you need to tackle
thorny issues such as investor protection,
even though lateral thinkers and troublesome people have become rare. Whether
the current draft is able to solve the problems piling up is everything but clear. Lawmakers have tried everything to exclude
untrustworthy bidders, but nonetheless,
many regulations have had next to no effect
or have been downsized to a minimum. But
Funds
why? Because it is not government regulation that matters but the selection of trustworthy bidders and decent distributors. A
hard task.
And consequently, the federal government
seems to be hiding behind inaccurate suggestions for regulation while unavoidable
loopholes keep emerging. As a matter of
fact, AIF would be allowed to invest up to
49 percent in securities, which could also
include Greece bonds, Commerzbank
shares, Facebook shares or US mortgage
bonds, which did not really pay off for
investors.
And now, a cut is supposed to be made in
terms of asset classes? That‘s nonsense.
Variety among asset classes is essential.
Common sense tells us that more than just
the yield/risk ratio needs to be considered
in the meantime when it comes to capital
investment, as investors increasingly
demand innovative sustainable products.
But above all, they want to decide themselves instead of being treated patroni
zingly.
The entire issue is becoming increasingly
polarized, as it is about high amounts of
money after all.
Open-ended funds to die?
The whole subject is polarizing the industry: High sums at stake: Around 84 billion
EUR are invested in open-ended funds.
13 open-ended funds with a volume of
around 24 billion EUR are currently being
wound up or are still frozen. The special
funds market comes in at close to 34 billion EUR and over 200 billion EUR have
been invested in the closed-ended funds
market to date, including loans for over
400 billion EUR.
Special funds also affected
And so it‘s clear that from the perspective
of volume alone, the consequences of the
discussion paper will be far-reaching: If the
draft is approved as it stands, it would
mean the complete prohibition of new
open-ended real estate funds. Existing
open-ended real estate funds will be protected. They will remain active. As the draft
currently stands though, new products
would no longer be possible. Richter is critical of such a rule. It is not in the interests of
investors to only allow real estate funds as
closed-ended funds in future.
Special funds are also affected by the
draft. Closed-ended real estate funds, by
contrast, are actually strengthened by the
proposals. However, they must also
accept a glut of rules which involve incisive changes and which not all issuers will
survive.
After the associations have submitted their
statements, the whole topic will be under
discussion in summer und early autum.
Now it is all about persuading politicians.
// Beatrix Boutonnet
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RZ_AnzSerie_185x65_dt+eng_29.06.2011.indd 4
29.06.11 12:29
27
13 hotel chains
on location criteria
A, B or C?
28
Augsburg. The German real estate
market is becoming ever more interesting for investors, especially in
non-prime locations. As well as the
B locations – which have already
attracted the attention of some
professional real estate investors –
C and D locations also have potential. This wasn‘t the finding of a hotel
insider, but of an „asset profiler“,
an online platform for commercial
real estate investment, based on
a joint market assessment with
BulwienGesa AG. The trend can also
be seen in the hotel industry: In the
following table,13 chains present the
criteria they use for choosing B and
C locations and indicate which
investors are interested in hotels
in secondary and tertiary locations.
I
n contrast to the trend in commercial real
estate, D locations are not contemplated
for hotel groups. The analysis revealed
that in 2011, investments in B locations
alone exploded, rising by 66%. Measured
in terms of total investment volume on the
commercial real estate market, investment
in B locations was up 5%, but by only
0.6% in C locations.
For the hotel industry, no figures are available as yet so no direct comparison is possible. Yet one other finding from the commercial real estate market ought to be reflected
in the hotel real estate market. “Private
investors are increasingly moving into real
estate,” the asset profiler writes. This also
includes family offices. This is also apparent from the responses of the hotel chains in
the following table.
October 2012
Hotel Chain
Number
hotels
Germany
Hotels
in B-/Clocations?
Criteria for
B and C locations?
Proximity to
A/B or B/C
desired?
Accor
339
B: 122
C: 139
Inh*, ONS*, RevPar
of existing hotels, customer
structure, micro-site,
visibility, transport
connections
no
Best Western
(BW)
192
B: 31
C: 2
B: at least 2 relevant
target groups
C: at least 3
not necessary
Carlson
Rezidor
51
B: 31
C: 2
Demand / potential for
respective category
in general yes,
but depends on
market potential
+ type of contract
Choice
40
B: 22
C: 9
Restaurants in surrounding
area or own limited F&B
offer
depends on
catchment area
of the respective
hotel
Golden Tulip
9
B: 2
C: 1
interesting revenues
generators
yes
Grand City
95
46
gesamt
Transport connections +
USP location + potential
customer segments
yes
InterContinental / IHG
71
14
gesamt
Good transport connections
+ visibility; at least 100,000
ONS + 100,000 Inh;
proximity to centre
doesn‘t matter
The second is often the first
Demand for secondary and tertiary locations, also in the hotel sector, results from
the dearth of core real estate in prime A
locations, but also from the much lower plot
prices in B locations. Various investors and
hotel operators have discovered that they
have been able to generate higher room
revenues and yields with midscale brands
in B locations than in premium sites.
Of course, the discussion begins with the
question of what‘s behind an A, B or C
location. Hotour Hotel Consulting based in
Frankfurt considers the following definition
as standard:
Primary locations (A): more than 3 million
overnight stays and at least 100,000 inhabitants.
Secondary locations (B): 750,000 to
3 million overnight stays and at least
100,000 inhabitants.
Tertiary locations (C): 100,000 to
750,000 overnight stays and at least
50,000 inhabitants.
The responses from hotel chains show, as
is often the case in the hotel sector, just
how different the approach to B and C
locations is. Some groups do not apply
different criteria to B and C locations,
whereas others draw quite fine distinctions. Proximity to various group brands or
cluster formation is not necessary for most
chains, though most apply synergy criteria. Grand City‘s Marketing Director Axel
Krumrey points out:
October 2012
Brands for
B and C locations?
Exceptions
at location
allowed?
Number of
rooms B/C?
Investor-Types
for B/C?
What type of
contract for B/C?
Most difficult
financing for B/C?
B: all brands except
luxury / upscale +
conversions
C: eco brands ibis,
Adagio and midscale / Mercure
depends
from
100
Family offices, regional,
hotel operators
B: management,
franchise for Midscale;
lease, franchise for
Eco
C: franchise,
management
na
BW, BW Plus, BW
Premier
na
40-50
for both
na
na
na
B: Radisson Blu
A, B and C: Park
Inn
na
Park Inn
110-200;
Radisson
150-350
very different
Local + private
largely franchise, otherwise management
... for all locations
Comfort, Quality,
Clarion
yes
at least
60-70,
generally
80-120
B: Institutional, funds,
owner operators
C: funds, owner operators
franchise
… for A and C,
depends on operator
profile
Premiere Classe,
Tulip Inn, Golden
Tulip
no
75
at least
na
B: franchise, management, possibly hybrid
C: franchise, management
… for C
Grand City, Best
Western, Mercure,
ibis
no
80-100 at
least
Local + family offices
franchise, own brand
na
Holiday Inn Family
of Brands
for resorts
80
for both
B: Regional, local, fewer international and/or Institutional +
more private; Regional +
local, interest waning
franchise
depends on local
market
29
Abbreviations: Inh = inhabitants, ONS = overnight stays, EQ = equity, na = not available / All data: hotel chains as of Sept 10, 2012
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29.06.11 12:29
October 2012
Hotel Chain
Number
hotels
Germany
Hotels
in B-/Clocations?
Criteria for
B and C locations?
Proximity to
A/B or B/C
desired?
Brands for
B and C
locations?
Exceptions
at location
allowed?
Number
rooms B/C?
Hilton
12
B: 5
C: 0
B: Very good transport
connections
– very good infrastructure +
acceptable return + demand
generators; location also leisure destination.
C: good transport connections + good infrastructure +
demand generators; locations possibly also
leisure destination
yes, but not
necessary
B: DoubleTree,
Garden Inn,
Hampton
C: Hampton
depends on
project and
profitability
criteria
100
for both
Lindner
25
B: 1
C: 8
inter alia, demography, purchasing power, infrastructure, competition, transport connections
yes, cluster an
advantage;
not necessary.
A, B, C: Lindner
(new brand me
and all only A)
no
generally
120-180
Marriott
30
B: 8
C: 3
Plausible business mix +
transport connections + visibility + portfolio considerations
If yes, then
brands must have
same quality
level
B: Courtyard,
Residence Inn
C: Courtyard
yes
100-140
Ramada /
Treff
54
B: 18
C: 22
B: central location + good
public transport links +
attractive environment
not necessary
B: Ramada, Treff,
H2
C: Ramada, Treff
none
100-120
Starwood
Hotels
25
B:4
RevPar, infrastructure,
connections, demand generators, hotel density inter
alia
Aloft, Element,
Four Points
depends
100-200
Steigenberger
67
B: 24
C: 3
InterCity: important
stations, airports
Steigenberger,
InterCity
na
150
30
not necessary,
depends on location and brand
yes, but not
necessary
Abbreviations: Inh = inhabitants, ONS = overnight stays, EQ = equity, na = not available / All data: hotel chains as of Sept 10, 2012
“Proximity helps for offers for price-sensitive
customers.” According to Managing
Director Marcus Smola, even Best Western
agrees to contracts where two brands are
close to one another, “if average room
rate and category supplement each other.”
Finance for B locations
sometimes easier
Visibility is an important criterium for hotels at
B and C locations.
In terms of finance, all are struggling.
Choice Europe Managing Director Margit
Hug describes the chances of non-prime
locations succinctly as follows: “It has
turned out that finance in good B locations
is sometimes easier to come by than in
absolute top destinations. This is certainly
due to required lease guarantees, which in
a B location are obviously lower, as well as
due to the attractive returns on offer from
good B destinations.”
Ulrich Widmer, Vice President Development
Central & Eastern Europe at Hilton,
explains it as follows: All five large German
cities (A locations) are on the same level,
though the choice of B locations is much
larger and offers much more room for
manoeuvre. Though caution is advised: B
locations differ greatly; the micro-differences can be enormous so that “meticulous
analysis is necessary,” Lindner Chairman
Andreas Kroekel explains.
Operators know: In choosing between A
and B locations, the return on investment
(for the investor) is decisive. Whereas a
October 2012
Investor types for B/C?
What type of contract
for B and C?
Most difficult financing
for ...?
Difficult to define
B: management,
franchise
C: franchise,
management
… for B and C: depends
on expected return of
brand or EQ participation of investor
Often local + banks, but
also large family offices
and Institutional
hybrid, management
na
B: Private + institutional
C: tends to be private
franchise, management
…for all
B/C: Regional + sometimes also global, if A
lease, management,
franchise
… for C
doesn‘t work
franchise
… for B + C, but also
dependent on partners‘
strength
Primarily local
lease, management
na
return of around 6% is necessary for A locations, it should be at least 7-7.5% for B
locations. And the banks? They of course
welcome every additional percentage point
of return! Basic trend here: Their requirements are rising. For them, it‘s no longer a
matter of location, but of result. // map
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29.06.11 12:29
31
October 2012
Multiple brands multiply themselves: higher synergies, better results
Double effects
Augsburg. Brands in twin pack at one location? Does this make sense? Accor, one of the pioneers of this idea, has
three ”hotel parks“ in operation with Ibis and Novotel in the German market; in Berlin, Hospitality Alliance with the
twin pack Ramada/H2 has been happy about the good results right from the start; and at Frankfurt airport, Hilton is
already registering strong investor interest for the Hilton and Hilton Garden Inn combination. In any case, the combination of high-rate and low-rate hotel, synergies in the back office, and complementary marketing is really touching a
nerve in times of strict cost-effectiveness considerations. And it is also leading to imitations: on the trade fair premises
in Munich, the second German twin pack, Ramada and H2, will open at the next Expo Real in 2013.
S
32
ince October 2004, Accor has been
operating the multi-branded complex
consisting of Ibis, Ibis Budget (formerly
Etap) and Suite Novotel in Berlin; similar
double-brand hotels can be found in Hanover and Hamburg (Ibis and Ibis Budget
respectively), as well as in Munich (Ibis and
Suite Novotel). ”To have one, two and
three stars under one roof is a fascinating
combination and generates flexibility,“ sums
up ”triple-GM“ Oliver Sparhuber in Berlin:
”With three brands, the booking overflow
can be regulated immediately.“ The group
of buildings located at Anhalter Bahnhof/
Potsdamer Platz in Berlin, strongly benefits
from its location, which attracts tourists and
business travellers likewise.
The Ibis Budget Hotel, formerly Etap, has
the highest occupancy rate so far at 80
percent. The rates of the other two brands
are only slightly lower. After Accor introduced the mega brand Ibis last fall and
Etap received a new identity as Ibis
Budget, there was some confusion at the
beginning but no rebookings, according to
Sparhuber. ”We do our marketing for one
large hotel with 592 rooms!“ However, the
three different products are helpful for our
acquisitions in the business sector and for
booking inquiries of individual travellers:
this way, the needs and cost sensitivity of
the interested parties can be sounded out
more exactly.
Today, price and efficient-conscious guests
are mainly concerned whether the hotel
offers free WLAN (Ibis Budget already
offers this) and breakfast or whether there is
a restaurant or not. The hotel park in Berlin
is able to meet this need: there is a restau-
rant, efficiently located in the Ibis Hotel,
which is located in the middle of the two
other hotels. The asparagus special in the
restaurant has been marketed in all three
hotels, for example.
This shows clearly: for the operator (and
investor), the real synergies of double or
multi-brand groups of buildings are developing in the background.
2x Hilton: differences disappear
The managers of the two intertwined Hilton
brands at Frankfurt airport can only emphasise this: in the Airrail Center The Squaire,
the Hilton Hotel and the Garden Inn by
Hilton share 90 percent of the back-of-thehouse area (common kitchen, administration,
among others). Charles Muller, Cluster General Manager for the two Hilton hotels, and
his colleague Marc Snijders, Cluster Director
of Business Development, describe further
things in common as well as differences:
The two hotels have separate lobbies, and
separate linen stocks on the individual
floors; however, the Garden Inn guests are
able to walk directly to the fitness centre via
the „inhouse“ floors as the fitness centre is
located in the Hilton building. But at the
entrance of the fitness centre, the guests
have to show their colours again: for each
brand, there is a separate box where you
put your room card in. The internet access
is regulated and separated as well thanks
to exactly aligned routers. Therefore, Garden Inn guests surf for free while Hilton
guests have to pay. This is a paradox,
which Hilton did not want to change
apparently due to its worldwide brand
standards.
Which brand in this twin pack is the more
successful one, half a year after the ope
ning? As a general rule, Hilton managers
are not allowed to reveal any figures by
order of their parent company Blackstone;
therefore, they paraphrase as follows: the
occupancy rate in the Garden Inn is higher
than in the Hilton, but the Hilton achieves a
higher RevPAR. Would another twin-pack
brand have any chance at this location, e.g.
a Hilton or a Hampton Inn? Both Muller und
Snijders say no to this in unison: a difference
between the brands is reasonable, but not
a large discrepancy with a product located
much lower in terms of price. ”The airport
location has to be earned,“ says Muller.
Imitations on the way
The Hilton twin-pack brand at the Frankfurt
airport has been customised just for the airport clientele concerning brand and cost
effectiveness, especially for MICE customers.
On average, overnight guests stay for one
day or one-and-a-half days. The majority are
conference customers in groups of 20 to
120 people. They usually arrive in the morning and leave in the evening or they just stay
one night in order to get the maximum out of
two conference days. It only takes three minutes to the airport terminal and the mainline
station. ”Concerning meetings, time saving
is always important,“ says Snijders.
The marketing of the two Hilton hotels
presents one hotel to the outside world –
with 583 rooms. Together with the Hilton
Frankfurt City, they could even merchandise
a total of 925 rooms. The good start-up of
the complex at the airport has resulted in the
fact ”that some investors are now looking for
October 2012
such brand packages,“ says Charles Muller.
And within Hilton, such twin-pack brands
already exist, among others in Tanger/
Marokko and in Great Britain soon as well.
Ramada/H2 also in Munich
The role models are functioning: at Alexanderplatz in Berlin, the Hospitality Alliance
(HA) has been operating as a twin-pack
brand consisting of a middle-class hotel and
a budget hotel since March 2011: one
Ramada (337 rooms/674 beds) and one
H2 (288 rooms/696 beds). The first is a
brand of the Wyndham partner, the second,
an individual creation of the Hospitality Alliance. Alexander Fitz, CEO of HA, describes
the same advantages and synergies like
Accor and Hilton; and he also points out the
better utilisation of the property and higher
space efficiency: in this way, the total investment costs and the lease load for the operator can be reduced in some cases.
In the fiercely contested market in Berlin,
the 4-star Ramada Hotel was able to generate an occupancy rate of 88 percent and
a RevPAR of 60 Euro in its first (abbreviated) operational year in 2011. The 2-star
product H2 was able to generate 89 percent and a RevPAR of 49 Euro. For the current year, HA expects a slight decrease in
occupancy (nearly 87 percent) and a significant increase of the RevPAR to 65 Euro
at Ramada; concerning H2, HA expects a
constant occupancy and also a significantly
higher RevPAR of 56 euros.
These figures are obviously motivating after
the first months: the same twin-pack brands
will open at Messe Muenchen (Munich fairground), across from the main entrance in
2013. The Fondara group of companies in
Munich is developing the large real estate
with 330 rooms in the Ramada Hotel &
Conference Center Muenchen Messe and
205 rooms in the H2 Hotel Muenchen
Messe. Right from the outset, the investors
and project developers have included sustainability criteria in the hotel project ”RiemHotels“ (referring to the old Munich-Riem
Airport at this location). Therefore, the
project has already obtained a gold certificate of DGNB. Here, the area efficiency
has been increased by an additional ecological balance sheet. In addition, the hotel
building has already been planned in
detail for possible use as an office building
after a conversion at a later date.
Philipp Hlousek, Executive Assistant of the
investor Fondara Immobilien AG, sees the
additional costs of such a sustainable
project justifiable measured against the
great benefit such a project generates.
Combined with the promising operations
figures, the twin pack in Munich could be
an exceptional success in future.
There are many reasons to take multiple
brands into consideration. // map
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33
October 2012
No common stance on owner agreements among chains
Things are better without
Wiesbaden. Drive for expansion of international chains looking for franchise or management agreements is massively
thwarted in the lease stronghold of Europe and Germany in particular. So-called owner agreements are meant to
reduce risks resulting from the growing number of three-way relationships between owner/investor, lessee and franchisor. But is this „safety belt“ worth all the time and money?
L
34
awyers are rubbing their hands with
glee: as soon as three contractual partners need to be reconciled instead of
two, business is on the horizon. In addition:
hotel operating agreements are concluded
not only between the owner and the operator as well as the operator and the franchisor, but also increasingly between the
owner and the franchisor. Owner agreements (OA) are meant to prevent owners
from suddenly being left high and dry without a brand if they have trouble with the
lessee. The other way round, they connect
the brand with the location in case the lessee goes into insolvency. But what are its
benefits in practice? The developers of Starwood Hotels, Choice, Marriott, and InterContinental Hotels (IHG) give some
answers.
Georg
Schlegel
Starwood has another name for this instrument but it has the same function. “We call
this a non-disturbance agreement (NDA),”
says Georg Schlegel, Senior Development
Director Starwood Hotels & Resorts. Basically,
this means that whatever happens to the franchisee, the brand remained connected to the
hotel. In general, says Schlegel, owners have
no contractual relationship with their franchisor. In case of a franchise agreement, the
relationship exists between the franchisee and
the brand. The same is true with Starwood.
However, this is not enough in the eyes of
some owners and franchisors. Should an
owner be let down by his lessee, the owner
normally have the following options:
• Taking over operations by hiring a managing director, for example, and entering
the franchise agreement.
• The franchisor enters the lease agreement.
• The franchisor concludes a management
agreement.
• The owner finds another operator the
franchisor stays with.
All representatives of international brands
agree that lease agreements should be
designed in a way that operators are able
to meet all brand standards and are in a
position to fulfil further contractual obligations. Normally, brands carefully check the
lease agreements of their franchisees,
before letting them use their brand. In doing
so, they also make sure that the obligations
of the owner are clearly defined in the
agreement, particularly with respect to obligations in terms of renovation.
“In the US, owners usually sign a 25-page
non-disturbance agreement without hesitation,” says Schlegel. “German owners, however, mostly want maximum freedom and
availability when it comes to their property,
which is why they refuse to sign an NDA.
We have therefore written off NDAs similar
to the ones in the US regarding franchising
in the German-speaking countries.” Supposed owners agree to the NDA, banks
might oppose... They will certainly not give
up the option to sell hotels non-branded.
Choice is working on OAs,
Marriott has them,
and IHG does not want them
According to Margit Hug, Head of Europe
of Choice Hotels, the hotel chain is experiencing a significantly increased interest of
owners in brand bonding. But a manage-
ment guarantee like the one Choice offers
in case of problems with lessees was not
sufficient for many owners in Europe. “We
are working out solutions concerning owner
agreements,” says Hug. Choice Hotels concludes 95 percent of its franchise agreements with the lessee. In the US, however,
agreements are solely concluded with owners, as they usually act as operators or
have entrusted a management company.
This is also the case with Marriott, confirms
Development Manager Markus Lehnert:
Margit
Hug
“In the USA, OAs are not that common as
owners are usually franchisees, which
makes OAs unnecessary. However, in the
case of OAs concluded in the US, owners
have many more obligations than here.
“Similar to Choice, Marriott or IHG are
solely interested in franchise agreements
when it comes to particular brands, and usually conclude them with the lessee.
“We don’t have an owner agreement,” says
Martin Bowen of IHG‘s development department. However, owners were able to obtain
information on franchisees from IHG such as
average rates or paying habits, if the latter
agrees. “As far as we are concerned, we
don‘t need any agreement with the owner in
order to leave our brands in a hotel. We
think that owners should be interested in
keeping our brand,” says Bowen.
October 2012
Markus
Lehnert
For example, an agreement between a
Holiday Inn and the owner, called “letter of
comfort” at IHG, was a type of early warning system for the latter. Furthermore, IHG
offered owners the opportunity of naming
three alternative lessees from IHG‘s pool in
case of troubles with a lessee. However,
the company did not conclude any management agreements. “We don‘t fall back
on these agreements automatically. They
mean additional work, after all. And they
are solely offered in Germany, which is an
outright lease market,” says Bowen. As
there were only a few operators with a reasonable balance in Germany, demand for
OAs was increasing significantly.
Owner Agreement by Marriott
Markus Lehnert from Marriott is a strong
advocate of owner agreements. “OAs can
be compared with safety belts in a car,” he
explains. “You don’t need them in everyday
traffic, but you put them on nonetheless.
They don’t hinder you, but when there is a
crisis, they are there and they work –
regardless of where the crisis comes from.”
The basic goal of an OA was to secure
Marriott‘s long-term engagement at specific
locations, both from the owner‘s and Marriott‘s view. The OA ensured that a hotel can
continue to operate under all circumstances. “The goal is to leave the actual
agreement as unmodified as possible.
Accordingly, the first step is trying to transfer the unmodified lease agreement to
another lessee who will then become franchisee as well,” says Lehnert. If that didn‘t
work out, there was an arsenal of further
steps Marriott internally calls “cascade”.
The last resort remained a temporary management agreement.
“Not all hotel owners immediately understand the benefits of an OA,” says Lehnert
knowingly. “But when they look into things,
they usually realize quite soon that the result
is a highly positive effect. If a lessee fails to
pay the rent, owners have more options, and
they cannot be as easily blackmailed. Basically, they can take Marriott up on its promise and say: help us solve this situation.”
In the worst case, owners ended up without
an operator, the hotel could become known
as a difficult property on the market, or a
potential new lessee seized the opportunity
to negotiate a more favourable agreement.
According to Lehnert, OAs can also be
beneficial for hotel operators. “They should
be able to do with less lease security, as a
foreseeable alternative can be quickly realized if they fail. There are no disadvantages for operators resulting from OAs,”
says the Marriott manager convincingly.
With OAs, franchisors secure themselves
the location. But it could turn out to be a
disadvantage for them, as they could not
separate themselves from the respective
hotel that easily.
to Starwood, IHG was a European company
and Accor and Radisson also didn’t know
many terms US companies are obliged to.
In order to accommodate the European
market better, both Marriott as well as Starwood have developed models that take
regional and individual specialties of owners into account. “This doesn‘t mean that
you can have everything with owner agreements, but in all cases, we managed to
meet both Marriott‘s and the owners‘ interests,” says Lehnert. Schlegel explains: “For
example, we try to integrate criteria that
are important to us in our lease agreements. This would make Starwood a beneficiary of the respective lease agreement.”
He convinced owners by pointing out that
they had no other contractual relationship
to Starwood. But an NDA made it possible
to receive information on the lessees from
Starwood as well as to learn about models
for the future.
OA specialities
The most common issues
Being employees of listed companies, both
Schlegel from Starwood and Lehnert from
Marriott need to overcome further obstacles
when concluding an OA or NDA. Accordingly, they may not do business with those
referred to as “prohibited persons”. This
means, neither owners or lessees may belong
to this group, nor are they allowed to give the
hotel to such persons. “In addition, we don‘t
want to sell to competitors and secure agreements with a servitude,” says Lehnert. Then
there may be modifications demanded by the
owner. Open funds are subject to legislation
such as capital investment legislation.
“Prohibited persons”, such as from Cuba or
North Korea, were particularly interested in
so-called “trophy assets”, and not in something like a Holiday Inn Express in Aachen,
says Schlegel describing complications by
means of example, and it seems that he even
envies his colleague Bowen a bit. In contrast
“Many owners don’t like to deal with the
OA issue in general,” says Lehnert. They
fear that they need to write and edit too
much text. “Some also dream of a triple net
agreement, preferably with the parent company of a major brand, or the dream of a
letter of comfort by this parent company.” He
says, the main reason for this caution was
the German property model, which involves
developers aiming at selling the property
after a short period of time. Therefore, developers became sellers, depending on the outcome of the negotiations on the lease agreement, and were forced to sell all agreements
to an investor. However, investors wanted as
few obligations as possible. “The world is
getting ever more complex, and luckily
agreements need to be read and negotiated
only once,” says Lehnert.
There is no patent remedy for dealing with
investors and lessees. But all brand providers interviewed agreed on one aspect: the
earlier all parties are included in talks on
financing and sales, the better. In the end,
franchisors were able to explain the agreements in a most plausible way and set forth
the advantages of this type of structure to
end investors, or make compromises. “Problems can be solved best through communication instead of contracts and agreements,” says Bowen hitting the nail on the
head and ensuring that this has much
improved over the past ten years. //
Susanne Stauss
Martin
Bowen
35
October 2012
How social media influence real estate values
The value of opinion
Munich. Can social media affect the value of hotels? „Yes, they can!“ says Bruno Wolf in front of a surprised audience
at Expo Real in early October. With several decades of experience in the world of hotels, the distribution and Internet
expert explained to financiers and investors the importance of this young distribution channel. Similar to being present
in classic reservation systems and online reservation portals, opinions of guests have a deciding effect on reservation
behaviour. Factors deciding on reservations thus affect turnover and profit. Bruno Wolf in an interview with
Maria Puetz-Willems on this new, young topic of „real estate and reputation management“.
S
ince last January, Bruno Wolf has been working as a
consultant in the field of distribution and Internet (www.hhcbrunowolf.com). Prior to this, he worked at the bed giant of
Marriott International as Director International eCommerce Distribution being responsible for all distribution and technology
issues. In the hospitality industry, he is regarded as a luminary
and good observer.
36
Mr. Wolf, why do social media like Facebook, TripAdvisor,
Google, and Twitter play such an important role in the search
for more turnover?
Bruno Wolf: When it comes to purchasing, 48 percent of consumers combine social media and search engines. This leads to quicker and more information being processed online. Consumers
gather results very quickly and distribute them via social media
channels. These results also affect reservation activity of other consumers: 90 percent of online bookers say that they trust in recommendations by friends, but 70 percent also trust in unknown users.
So evaluation and reservation channels
merge smoothly in the meantime?
Wolf: Yes! The hotel evaluation portals
were pioneers in this respect. Facebook or
Twitter – or simple photo portals – transport
opinions extremely quickly and to more
and more people. Facebook’s growth figures clearly show this.
Who needs to be familiar with these
opinion and reservation channels in the
hotel?
Wolf: The revenue manager and the general manager, of course. They can use this
influence to the benefit of the hotel and generate more reservations.
How can opinions be converted into
turnover?
Wolf: The opinions found on a hotel evaluation portal are combined in rankings. These clearly request hotels to further boost
evaluations and care for communication
Bruno Wolf
with guests. Some evaluation portals, however, take advantage of
this situation: they sell hotels the possibility to provide a link right
to their website, which saves hotels commission payments. And
then they gradually raise prices ...
What do revenue managers need to do specifically?
Wolf: They need to interpret these rankings in a professional manner and take advantage of them. Should their hotel get better evaluations than their competitors, revenue managers should be able
to raise rates. This starts a sort of automatism: higher turnover and
higher room revenues lead to higher profits and higher yield for investors/owners.
Are there any hotels that are able to calculate the benefit of this
interplay between social media and turnover in euros and cents?
Wolf: The Mercure Hotel Duesseldorf-Hafen is able to track this relation to some extent. The hotel is operated by Wolfgang vom Hagen, an experienced hotelier and consultant. The Mercure Hotel
Duesseldorf-Hafen takes evaluation portals
like TripAdvisor, Holidaycheck and many
more very seriously and integrates their
evaluations in all activities connected to the
hotel. Each new evaluation is analysed in
detail, improvements are realized as far as
possible, and constantly discussed with the
entire team.
As a consequence, the average rate has
climbed to 85 euros, whereas it was at 64
euros in 2006. And since then, there has
been a financial crisis which led to massive
losses for many hotels. This result is all the
more surprising. Within five years, vom
Hagen has managed to increase his hotel’s
value by four million euros – according to
his bank. The bank ascribes 15 percent of
this to social media activities.
Do social media change the way in which
hotels should compare each other?
Wolf: Today, revenue managers need to
know and manage everything that is being
said about their hotel and its competitors –
October 2012
Selling or
buying a
hotel?
There’s nobody better
to accomodate you.
Our services: Agency I Advisory I Valuations
and that via various platforms like travel sites, videos, Facebook, Twitter, blogs, photo sharing and evaluation sites.
What share do evaluations have in real estate values?
Wolf: A big share! I don’t think, there are any concrete figures reflecting this at the moment. It is definitely still a very
new topic and mostly unknown to investors and owners.
What question posed by investors/owners would impress
operators if you wanted to address the whole issue?
Wolf: I would ask: „How strongly do you push your rate
and how do you convince potential guests to book your
hotel?“ This would automatically lead to added value. This
is a simple sellers’ logic: consumers are strongly attracted
by discount concepts like Groupon, but also by auctions
like eBay. Particularly Germans are well-known bargain
hunters!
However: even bargain hunters are willing to pay more if
they can expect more for their money! And then they communicate this good news via social media – and this is
when the „opinion spiral“ gets going again.
How can hoteliers and revenue managers foresee opin
ions and reactions, and decide when it is the right time
to raise their rates?
Wolf: They need to deal better with their forecast, i.e. stick
to the rules connected to their turnover and occupancy predictions. The right timing of rate decisions requires both a
sensitive and precise hand. Often, guests gather more information than the hotels themselves. Here, hotels should
trust in intelligent software.
All in all, this means that a hotel’s value will depend
more than ever on the opinion of its guests and skillful
rate policies in the future. Will this trend continue?
Wolf: Absolutely. Today’s consumers are better informed
than ever, and at the same time, they tend to book on increasingly short notice. In order to grab this type of guest,
you need full command of the entire distribution gamut –
and revenue management.
Thank you very much for the interview!
Why work with us:
+ More than 75 years’ sector experience
+ Circa 350 transactions and 450 valuations per year
+ Europe’s largest team of hotel property experts
+ International network: 27 offices across Europe
+ Regional knowledge – global expertise
+ Innovative marketing concepts
Berlin – Our new address!
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T: +49 (0) 30 / 20 00 96-0 E: [email protected]
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Bockenheimer Landstraße 93, 60325 Frankfurt
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Pfisterstrasse 6, 80331 Munich
T: +49 (0) 89 / 2 00 00 07-0 E: [email protected]
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NEW! Warsaw
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www.christiecorporate.com
37
October 2012
Swiss franc and euro also challenge foreign hotel companies
38
Switzerland facing test of endurance
Augsburg. The strong Swiss franc raises a dramatic question at the end of the year 2011: will Switzerland witness the
death of several hotels next year? Not only hotels in Switzerland are affected by the test of endurance related to the
Swiss franc and the euro, but also foreign companies headquartered in Switzerland and forced to make out their
balance sheet there as well. In addition, all hotel companies are affected that are located outside Switzerland but have
financed their loans in Swiss francs. On both sides of the border, the mood is rather depressing at the moment.
In Switzerland, tourist numbers are collapsing, more and more Swiss are spending their holidays in Austria or Switzerland. A December 2011 snapshot of Austria, Switzerland and Germany.
I
n spring 2011, the Swiss national currency had gained enormous power forcing the Swiss National Bank to set a minimum exchange rate target of 1.20 francs
per euro in early September. Although this
alleviates the problem, it does not solve it –
not even for the hospitality sector. The
number of room nights definitely dropped
alarmingly. Even nameable Swiss hoteliers
are not beating around the bush about their
recent worries. “The currency losses on the
euro market mean a considerable surplus
burden to our guests from the euro zone,”
says Peter Tschirky, Chairman of the management of Grand Resort Bad Ragaz (3
hotels, 289 rooms).
“We‘ve lost about five percent from the
German market, which is even more distressing, as this market traditionally has a
share of a good 30 percent.” Corinne Denzler, CEO of Tschuggen Hotel Group headquartered in Arosa (4 hotels, 358 rooms),
comments: “Since the exchange rate was
fixed at 1.20 francs per euro, the euro
issue has slightly cooled down. Nonetheless, market conditions have become
harder for us, and we expect the number of
reservations from the euro zone to decrease
by five to seven percent.”
Even the Swiss are running away
The German hotelier Otto Lindner, whose
hotel group has three hotels in Switzerland, namely in Leukerbad, Interlaken and
Crans-Montana, chimes in: “The franc‘s
significant price increase has hit us hard.
Only through price concessions have we
managed to keep our occupancy level,
however, the side income of our hotels is
also declining. After all, it seems that the
worst is behind us, as advance booking
for the winter season has been running
well so far.”
But the currency aspect is only part of the
story. Both Peter Tschirky and Otto Lindner
almost use the same words when talking
about an even “worse” effect: guests from
Switzerland, who have always been very
loyal, are “fleeing” abroad – mainly to the
neighbouring countries of Austria and Germany – due to the strong franc. The priceservice ratio feels almost like heaven on
earth. Peter Tschirky says sarcastically:
“Maybe it is a tiny highlight that we managed to put a halt to erosion of these two
major markets for the first time in October
and even in November.”
October 2012
The Grand Resort Bad Ragaz balanced this
out by extended offers providing “added
value”, among other things. Accordingly,
the usual room and breakfast rate also
includes dinner.” However, in economic
terms, this means extra costs for the hotel.
Occupancy of the Grand Resort Bad
Ragaz currently amounts to 60 percent,
and all indicators for future development
are positive. Despite that, Tschirky knows
that the fate of hoteliers strongly depends
on politics once again: “Regarding currency, the Swiss franc must not grow
stronger, and the euro zone needs to
regain the trust of international financial
markets.”
The decline of the euro compared to the
Swiss franc has broad repercussions across
geographic borders. In Germany, Austria,
and Hungary, many companies have
financed themselves based on Swiss francs
trusting in the long-term stability of the franceuro ratio.
However, no one knew any exact figures,
says even Dr. Franz Hartl, Managing Director of Oesterreichische Hotel- und Tourismusbank (OEHT, Austrian Hotel and Tourism
Bank) in Vienna. “Among colleagues it is
supposed that about 30 percent of the
companies located in the West (Tyrol,
Vorarlberg, Salzburger Land) include a foreign currency loan in their balance sheet.
In the eastern federal states, this share will
be significantly lower.” This complies with
observations of other insiders reporting to
hospitalityInside.com that, in the past few
years, Swiss bank officials have been
roaming the border regions close to Switzerland, like Arlberg and Tyrol, trying to sell
loans in francs.
At the moment, says Franz Hartl, the urge
for this method of financing was declining,
as the new guideline issued by the financial
department, these loans are to be granted
on a highly restrictive basis. “Furthermore,
the development of the franc has dampened any motivation of taking loans in this
currency,” he says soberly.
In fact, the strong franc means considerable
additional cost to borrowers – sometimes
amounting to 25 or even 30 percent.
Those sitting on debt of 10 million francs
resulting from a loan in 2000, for example,
had to pay back two million euros more
than they actually received. Such additional
costs resulting from the exchange rate difference cannot be balanced out by any interest benefits.
Consequently, any losses due to exchange
rates negatively affect the balance sheets.
“This lowers the equity capital ratio, which
in turn makes new financing even more
expensive and difficult,” says Reisenzahn
describing the consequences.
Jan Eckert, CEO Jones Lang LaSalle in
Switzerland, considers the current situation
a “structural problem” that logically affects
all industries. In his point of view, it is not
the entrepreneurs (hoteliers) that have the
biggest problems, but the banks. Eckert
refers to extensive country analyses conducted by the Swiss National Bank:
according to these analyses, loans in Germany, France, and Italy were less important, whereas loans in Austria were significantly greater.
In Poland and Hungary, loans based on
Swiss francs even surpassed the volume of
loans based on euros, he says, still referring to analyses that, however, include all
economic sectors (private households and
companies). It is hard to tell whether and if
these general country statements reflect the
tourism and hotel industry.
Rigid structures and too high costs
Travellers do not see such backgrounds.
They book according to the price or the
price-performance ratio. For guests, who
come from euro countries, vacations just
From left:
Franz
Hartl,
Orlando
Gehrig,
Peter
Tschirky
have become more expensive right now.
“Perhaps, some of our guests will prefer Austria or Northern Italy for their winter vacation
instead of Switzerland,” says Giuliano
Guerra, delegate of the advisory board of
Travel Charme Hotels & Resorts AG.
Guerra knows the challenges of balancing
based exchange rates (the German leisure
hotel group is headquartered in Zurich) as
well as the rigid and expensive structures of
Swiss hotels: “High staff costs, costs of
sales and fixed costs cannot be reduced
over night, in order to accommodate guests
from euro countries,” he says, pledging
sympathy for the situation of his colleagues.
Swiss hoteliers have to keep the Swiss
guests in their own country in order to compensate the decline from foreign markets.
“Therefore, we gave the home market more
importance in our advertisements for the
winter season,” explains CEO Corinne
Denzler of Tschuggen Hotel Group. “For
Carlton St. Moritz, the hotel with the highest number of international guests, we even
doubled the budget for the Swiss market.”
Despite the very strong Swiss franc, the
group does not intend to reduce the price
or even entice or try to keep guests by bargain sales. Denzler relies on attraction:
guests of Carlton St. Moritz are rushing
through the ice channel with hotel-owned
bob taxis, and long-time guests of Eden
Roc Ascona are able to book Italian lessons in the winter...
Pressure determines the speed of dying
But the product improvement alone will not
solve the problem of Swiss hotels. The reasons are more severe. Therefore, Orlando
Gehrig, manager of economic policy at the
industry association hotelleriesuisse, says:
“The change of structure has been in process for some time now in the Swiss hotel
industry. The strong franc will only speed
up the change. Unfortunately, the strong
Swiss franc also affects economically
healthy businesses.”
Of course, the association does not want to
predict an imminent “dying of hotels”, but
major hoteliers like Peter Tschirky are
addressing the problem more clearly: “If
this enormous pressure remains in the next
few years, it will cause a major hotel dying
in Switzerland.”
// Maria Puetz-Willems
39
October 2012
How Katara Hospitality acquires real estate and plans its expansion
Hospitality made in Qatar
40
Doha. With the award for the FIFA World Cup in 2022, the small, oil-rich
desert country of Qatar has placed itself on the world map. Just as Dubai had
once created the marketing jump with the Burj Al Arab, now the government
in Doha is gathering mega events. However, this decision has great consequences for the small country. Since then, the entire (tourist) infrastructure has
been placed on the test bench and above all, must also be suitably developed
for the masses. Hotels play a central role along with this. Today, Doha counts
15,000 rooms and it should be 65,000 in ten years. Up to now, the control of
the hotel offers lay almost exclusively in the hands of the state hotel company,
Qatar National Hotels (QNH). It changed its name to „Katara Hospitality“
at the beginning of May. At the same time, the government owner, developer
and operator is making a „place“ for external hotel investors. Therefore, it is
more strongly involved beyond the country and has rapidly developed into
a hotel company of international repute operating overseas in France, Switzerland, Italy, Egypt, Morocco, Comoros and Singapore. In Doha, Maria
Puetz-Willems spoke with Hamad A. Al Mulla, Chief Executive Officer of
Katara Hospitality, regarding Katara Hospitality, the hotel industry in Qatar
and about the large hotel engagement abroad by the Qatari.
A
t the beginning of May and in
Dubai, Sheikh Nawaf bin Jassim bin
Jabor Al Thani, Chairman of previous
Qatar National Hotels (QNH), encapsulated the new strategy of Katara Hospitality
at the “Arabian Travel Market” in these
words: “We were in the forefront of Qatar’s
hotel development for over four decades.
Now we are setting the course to establish
Qatar with a reputation as a key player in
the international tourism market.” Hamad A.
Al Mulla expands on this in a conversation
with hospitalityInside.com. He, himself, studied Hospitality Management in Austria and
has worked as a general manager at various hotels in Qatar (see curriculum vitae).
Mr. Al Mulla, QNH resp. Katara Hospi
tality had already opened the first
international brand hotel in Doha in
1982 – the Sheraton. In 1993, QNH
had sprung up which then took over all
properties from the predecessor com
pany, Qatar National Hotels Limited.
How many hotels were there at that time?
The future symbol
of Doha: Lusail City
October 2012
Hamad A. Al Mulla: In 1993, the company had only five assets under its portfolio,
which were Sheraton Doha, Marriott Doha
(known then as Sheraton Gulf Hotel), Doha
Club (currently the Doha Sailing Club), Doha Limousine (currently Karwa) and a QNH
catering unit.
In 2006, QNH ventured the expansion
abroad for the first time with the pur
chase of the Renaissance Sharm El
Sheikh Golden View Beach Resort in
Egypt. How does the company present
itself today, in 2012, under the new
name Katara Hospitality?
Al Mulla: We have already become a global player over the last six years and the
Hamad Abdulla Al Mulla
has been appointed Chief Executive
Officer of Katara Hospitality in August
2011. He joined the team at the head
office of Katara Hospitality in December
2009 as Chief Human Resources and
Administration Officer. Hamad has
been part of the company’s journey for
more than half of its 40-years history.
Having completed Hospitality Management & Tourism studies at the University
of Salzburg in Austria, Hamad started
his hospitality career in 1991 at the
Sheraton Gulf Hotel, currently known as
the Doha Marriott Hotel. Prior to joining
Katara Hospitality head office, Hamad‘s
most recent positions were in the capacity of General Manager at Merwebhotel
Al Sadd Doha, after having held similar
positions as General Manager of Doha
Club in 2006 and Deputy General
Manager at the Doha Marriott Hotel
until 2005.
new name should also help to document
this to the outside. We currently own and
operate 12 hotels and 11 others that are in
development or construction so that we can
count more than 4,000 four and five star
hotel rooms in eight international destinations. In 2016, we would like to have
30 properties and then in 2030, 60 all
over the world. We operate the hotels under the brands of international chains or under our own brand. Katara Hospitality also
leads the 4-star brand in Qatar, Merweb
(see box regarding Katara Hospitality details).
Katara Hospitality is an owner, developer
and operator. Which function has priority
for your company?
Al Mulla: The property. However, we only
buy „real estate with heart“, e.g., landmarks like the Raffles in Singapore, the Royal Monceau or the new Peninsula in Paris.
On the other hand, we assist through the
construction of real estate – like on the Comoro Archipelago – a country in the development of its tourist profile. Many people
have money, but we invest at the right time.
Who sits on your asset team and what
return on investment (ROI) do you
expect?
Al Mulla: We are all hotel specialists and
only decide within the team. Specialists in
financing, development and construction
are within this. In no circumstance should
the ROI lie at less than 12 percent.
Do all Katara Hospitality real estate or
hotels fulfill such a high ROI requirement?
Al Mulla: No, some hotels from our portfolio
may only reach 6 or 7 percent. But their location is excellent and so, we remain in the
various destinations on the „map of the travellers’ world“. Of course, we do, however,
conduct a SWOT analysis with these properties. For example, a general manager at
a hotel is replaceable, a good host is not.
And the bellboy must be able to smile just as
friendly as the waiter and the receptionist. It
also depends on the „software“ in the company. Therefore, we also ask for exactly this
at the less profitable hotels – and particularly
when we see a gap with another property
with a higher RevPar. As a rule, our hotels leverage after five or six years.
How do you select the hotel operators?
Only those who are also involved in
Katara Hospitality or other Qatari com
panies?
Al Mulla: Generally, we look at each property as an individual entity having its own
particularities and we select the operator
based on the hotel’s needs and the
operator’s area of expertise. We invite various suitable global operators to the pitch
and the decision is made by a team of experts at Katara Hospitality with the support
of studies by third party consultants if required. We usually start with ten year management contracts.
How much revenue comes back from the
value of a brand with your international
operators?
Al Mulla: 60 percent of the revenue comes
together on the basis of a good location –
as for example, at the Champs Elysée Paris. The remainder can be traced back to
the brand.
Qatar is the richest country in the world
and the only one with a positive cash
flow. Do you benefit from this through
hotel financing or do you simply need no
more financing?
Al Mulla: We primarily finance the projects, through banks. And every property
goes through nine controlling committees
before its approval.
Up to now, the Katara Hospitality portfo
lio does not yet appear to be very strate
gic, but rather driven by happenstance.
How will you change this?
Al Mulla: Indeed up to now, we have been
asset and opportunity driven and we stand
only at the beginning of a more clear strategy. By rebranding as Katara Hospitality, we
have created a new corporate identity
which is relevant to the company’s ambitious
international expansion plans and heralds a
new era of opportunity, in line with Qatar’s
own tourism development strategy. As we
embark on a new wave of strategic expansion, we have seized the opportunity to redefine the brand and set the platform for future
growth of not only our rapidly expanding
portfolio, but of Qatar’s reputation as a key
player in the global tourism market.
Included within this is the distribution – the
reduction – of activities in Qatar and a
stronger engagement beyond the country
and beyond Arabia. As a national hotel
group we must, above all, maintain our
own hotels within the country in a good
41
condition. Therefore, we will completely renovate the Marriott, Sheraton and Ritz-Carlton in Doha soon.
Where did the average room occupancy
of the Katara Hospitality hotels lay in
2011, how high was the achieved
RevPar in average? And how are these
for the entire hotel industry in Qatar?
Al Mulla: Occupancy rates for the first half
of 2012 reached 67%, having decreased
with 5% as compared to the same period
of 2011, while maintaining itself as one of
the busiest markets in the region. The drop
in occupancy slightly impacted the average
room rate, which decreased with only
1.6%, placing Doha as the second highest
market in the Middle East.
42
Another 77 new hotels and 42 apartment
hotels should be built in Qatar by 2022,
in total, a capacity of 65,000 rooms to
be created. Currently there are about
112 hotels and apartment hotels with
approximately 19,000 units. How many
of them will Katara Hospitality addition
ally build and operate?
Al Mulla: Currently, Katara Hospitality is
actively focusing on strategic international
expansion. We feel we should allow local
investors to benefit from the raising demand
in the hospitality industry generated by the
upcoming FIFA events in 2022. However,
we are planning two new hotels in Qatar:
True „iconic hotels“ in the marina and fox
hills areas of the newly developing district,
Lusail City in Doha (opening in 2016)
which will supply more than 1,000 units to
the room inventory of the country and various innovative food and beverage concepts
will contribute to enhancing the experience
of any visitor to Qatar. Additionally the
Merwebhotel City Centre Doha (opening in
2013) will be operated by our home
grown Merweb brand.
How many hotels will Qatar and Doha
still generally need after the FIFA World
Cup?
Al Mulla: We perceive 2022 as a deadline for a stage in implementing the Qatar
National Vision and not as finality. Qatar is
set to diversify its economy beyond the oil
and gas industries and hospitality is regarded as part of the infrastructure needed to
support the overall development of the
country. We believe that the number of hotels available by 2022 will be sufficient to
Raffles Singapore: Landmarks
are long term assets.
host the influx of tourists coming in for the
games, while these properties will continue
to provide the hospitality infrastructure required in the future.
With the 12 new football stadiums, it is
openly being discussed to develop a por
tion of them as “mobile stadiums” and
“to move” them into other countries. Does
Qatar perhaps also plan such “mobile
hotels”? Or temporary hotels that are dis
mantled afterwards? Or properties that
one can very quickly convert into offices
or residential buildings?
Al Mulla: In 2006, when Qatar hosted the
Asian Games, cruise liners were brought in
to accommodate the fans during the month
of games as building new hotels for just
that one off event was not sensible. Currently, Qatar is looking to host many more
events ahead of the 2022 World Cup and
beyond which would contribute significant
growth to the value of the region’s tourism
coffers.
The annual tourist arrivals into Qatar
should increase to 3.7 million by 2022
and with the new Doha International Airport, the Doha port project and metro and
railway system, we foresee an optimistic
and sustainable outlook for the hospitality
industry in Qatar.
As mentioned in the previous answer, we
regard the hospitality industry as part of
the infrastructure needed to support the
country’s development. 2022 is a major
milestone of the journey. Therefore, we do
not feel that „mobile hotels“ will be a solution for avoiding oversupply after the 2022
events.
The tourism forecasts for the country are
very positive for the coming years without
the FIFA World Cup. One assumes a per
manent growth. Euromonitor forecasts
around 1.6 million visitors by 2014 – in
2009, this was still less than just one mil
lion. How will Qatar and those at the
head of Katara Hospitality ensure that
there will also be sufficient staff in the
hotel industry?
Al Mulla: In view of the new development
at the moment, many hotel staff members
who have worked abroad up to now will
come back to us, to Katara Hospitality. Currently, it is difficult to get technically experienced staff members to Qatar. Basically,
we stick to the motto, „train & retain, transfer, promote“. Of course, we engage personnel advisers and head hunters in the
search for staff, but also cooperate with hotel universities like the Ecole Hôtelière Lausanne and others.
I think that Qatar will open their own hotel
technical school or university here on a permanent basis – but maybe only after 2022.
Until then, we will rather open a training
centre. They know that „Education“ is a focus of the Qatar Foundation and a personal concern of Her Highness Sheikha
Mozah.
How high is the local percentage among
the staff members in the hotel industry?
And is this industry generally attractive
enough to inspire Locals? Will there also
be another “local rate” here like in
Dubai, for example?
Al Mulla: Katara Hospitality is committed to
investing in our indigenous population and
October 2012
ABOUT KATARA HOSPITALITY
In Qatar, Katara Hospitality currently
owns five internationally branded hotels
in Qatar: Sharq Village & Spa, The RitzCarlton Doha, Sheraton Doha Resort &
Convention Hotel, Doha Marriott Hotel
and Moevenpick Hotel Doha. Two Merweb branded hotels – the Merwebhotel
Central Doha and Merwebhotel Al Sadd
Doha – and a third, the Merwebhotel
City Centre Doha, which is scheduled to
open in 2013, complete the domestic
portfolio. In addition, it also owns and
manages the Sealine Beach Resort, one
of Qatar’s favourite vacation spots.
Internationally, Katara Hospitality’s portfolio currently includes the Raffles Hotel
Singapore, Le Royal Monceau Raffles
Paris, Schweizerhof Hotel Bern and Renaissance Sharm El Sheikh Golden View
Beach Resort in Egypt.
International properties under development include Buergenstock Resort Lake
Lucerne (opening 2014), Royal Savoy
Lausanne (opening 2013), Gallia Hotel
Milan (opening 2013), The Peninsula
Hotel Paris (opening 2013), another five
star luxury boutique hotel in Paris (opening 2013), Comoros Beach Resort (opening 2014), Tazi Palace Hotel Tangier
(opening 2014).
supporting the aims of the ‘Qatarisation’ initiative that creates unique employment and
career opportunities for Qatari nationals.
We are firmly working on ensuring a substantial increase in the percentage of Qatari youth employed within Katara Hospitality
and have developed a proactive approach
to Qatarisation within our hotels, having signed agreements throughout the past year
with The Ministry of Labor and Social Affairs and we also sponsor a minimum of
two Qatari high school graduates for a
three year university term every year (in Qatar or aboard) resulting in securing employment for the sponsored student.
Personally being at the helm of Katara Hospitality, as a Qatari National and having
been with the company for almost 20 years, I believe this alone inspires the Qatari
youth and encourages them to tap into the
hospitality industry as it develops them by
exposure to different cultures and equips
them with a career for life that can open
doors for them anywhere in the world.
at the „Arabian Travel Market“. Qatar is a
„cash rich company“.
Let’s talk about the foreign engagements
of Katara Hospitality. Your list of newly
purchased real estate and the choice of
the locations stretches itself throughout
the entire globe. There are many pre
mium names within it …
Al Mulla: Yes, there are several international projects which we have also purcha
sed that will be in place in 2013 and
2014: The Royal Savoy Lausanne will re-
How is Katara Hospitality linked with
the Qatari Diar Real Estate Investment
Company? Up to now, these were com
panies that emerged as a buyer of vari
ous hotel real estate, e.g., in Switzer
land with the purchase of the Buergen
stock Resort in Lucerne.
Al Mulla: Both Qatari Diar Real Estate
Company and Katara Hospitality are entrusted to support Qatar’s growing economy.
We are setting the course.
Sheikh Nawaf
Bin Jassem Al
Jabor Al Thani
open next year; the Gallia Hotel Milan
and the Peninsula Paris are further away.
Furthermore, there will be an additional
5-star hotel in another Paris location.
Then in 2014, the Buergenstock Resort on
Lake Lucerne will blossom anew after a
300 million Swiss franc investment (approx. 250 million Euro), followed by 55
million dollars of heavy renovation for the
Tazi Palace in Tangier, Morocco.
Moreover, we plan the construction of a
new beach resort on the Comoro Archipelago. We are already in due diligence
for projects in Gambia and Cairo.
To this day, how much money has Katara
Hospitality invested in real estate outside
of Qatar?
Al Mulla: In total, this is more than 170 billion Qatar Riyal (approx. 37 billion Euro),
as His Excellency Sheikh Nawaf bin Jassim
bin Jabor Al Thani also officially confirmed
Sheikh Al Thani
Since 2005, Qatari Diar is focused on the
coordination of the country’s real estate developments. For more than 40 years, Katara Hospitality has been at the forefront of
the hospitality industry of Qatar. As we aspire to become one of the leading hospitality organisations in the world we have acquired hotels initiated by Qatari Diar.
The properties acquired by Katara Hospitality from Qatari Diar in 2011 fit our strategies of international expansion. In the future, Qatari Diar’s main interest will lay in real estate investments and developments,
while Katara Hospitality will focus on hospitality acquisitions and developments.
What do you say to people who have
concerns in view of Qatar’s expansion
and company participation in many
industries and companies that the country
will gain too much influence through its
money?
Al Mulla: In past decades, Arabs have also
repeatedly invested abroad – for example,
Kuwait. In an earlier time, it was Abu Dhabi instead. It will be Qatar in the future. However, we force no one to work together
with us or come to us. We have a vision.
And in spite of the latest financial crisis, we
still have our head well above the water.
That‘s the beauty.
Many thanks for this conversation!
43
October 2012
A photographic art project together
with art students gives each new InterCity lobby a
local touch, e.g. in Vienna.
44
25 years InterCity: Managing Director Marusczyk about ways & values
A rough diamond, not for sale
Frankfurt/M. Without InterCity Hotels, maybe there would be no Steigenberger Hotels either. The solid 3-star
subsidiary is the rough diamond among the jewels of the luxury-oriented hotel company in Frankfurt. „Without the
Steigenberger family, there would be no InterCity,“ says Joachim Marusczyk as he praises the reliable backbone of the
past. The 63-year old is not only Managing Director but also the founding Managing Director of InterCity Hotels.
It was his idea to establish sophisticated, strategically oriented „station hotels“ – this idea was born in a bar in the
middle of the eighties. Joachim Marusczyk on the development of the formerly dull „Bundesbahn-Hotels“ (hotels of the
German Federal Railway) to lifestyle-oriented midscale products, and on the status of InterCity Hotels today.
I
nterCity has been his life – literally. Nevertheless, Joachim Marusczyk remains modest, even when he takes a trip down memory line. In the Steigenberger Metropolitan
Hotel, the neighbouring hotel of the first
InterCity Hotel, which opened in 1991 at
Frankfurt‘s central station, he recalls the
unique history of the hotels. In the middle of
the eighties, Deutsche Bundesbahn (German
Federal Railway, today DB) owned about
20 hotels on the premises of railway stations. “They were mockingly called ‚BuBa
Hots‘ and they really looked that way,” he
says with a chuckle. He presented his idea
to the DB President Reiner Gohlke and Hem-
joe Klein, Member of the Board responsible
for Marketing (he invented the “Bahncard”),
and they started working on a concept. In
doing so, the InterCity Hotel GmbH was
founded. “The name InterCity was already
protected by the Railway at that time, as
three restaurants with this name already
existed,” explains Marusczyk.
As at the end of the eighties, the highspeed trains and tracks developed, Railway
started thinking globally – and conducted
intensive negotiations with chains such as
Hilton, Trusthouse Forte and Novotel/
Accor. However, the plan for an “InterCity
Hotel Hilton” or an “InterCity Hotel Ibis”
became impossible “as all the hotel operators wanted to have exclusive contracts,”
reports Marusczyk retrospectively. Temporarily, there were three InterCity Hotel Ibis in
Duisburg, Duesseldorf and Bochum, “but
this double branding was unfortunate.”
However, the decision remained to set the
course for InterCity Hotels by themselves.
The takeover by
the Steigenberger family
At that time, Hemjoe Klein was friends with
Wolfgang Momberger, the son-in-law of
Egon and Annemarie Steigenberger, who
later fell into disgrace (Momberger devel-
October 2012
oped the budged brands Esprix and Maxx,
which only existed for a short time). Momberger convinced the Steigenberger family
of the idea of InterCity; the family quarrelled about the sense and purpose, “but
Annemarie Steigenberger was in favour of
the idea,” says Joachim Marusczyk. In this
way, the economist and Senior Administrative Officer of the German Federal Railway
Joachim Marusczyk became Managing
Director of the brand under the management of Steigenberger.
In 1989, Steigenberger participated in the
InterCity Hotel GmbH with 49 percent at first
and increased its shares to 96 percent in
1994, when the state-owned enterprise was
privatized under the name of DB. The last
four percent were only taken over in 2001.
InterCity was given the green light from the
beginning; however, the brand never
became as fast as the ICE trains. Why not?
“The Steigenberger family has always seen
the brand‘s development on the long term,”
explains Marusczyk. “From the beginning,
we paid attention to profitability; we
always financed ourselves with our own
funds – without foreign capital.” Of course,
the expansion could have been faster if the
shareholder would have provided start-up
financing.
Today, after many years of economic experience and economically turbulent times, he is
very sure about one thing: Without such as
enduring owner as the Steigenburger family,
InterCity Hotels would have been long sold
and the rough diamond worn out.
Stability factor and profit earners
Today, the brand has an enormous value
and continues to boast an enormous potential. “For 2012, we are expecting a turnover of 90 million Euro,” he revealed. Other
current figures will be presented at the Steigenberger press conference, which will
take place soon. If the shining eyes of Marusczyks are anything to go by, the return on
investment (ROI) will probably be in a considerable double-digit range.
“At Steigenberger, InterCity is a stability
factor and profits earner today! We profit
from the name Steigenberger, and Steigenberger profits from our earning power.”
And then he uttered the most important sentence: “At the moment, InterCity Hotels is
unsalable!” Hamed El Chiaty also acknowledged this; he has been the owner of Steigenberger Hotels AG since 2009.
There have always been purchase requests,
among them also many renowned investors
and operators. “But I also advocate a longterm strategy,” emphasises Marusczyk
again. “We obtain a good return on equity
and this is worth a mint.” 75 percent of the
turnover of InterCity Hotels is generated by
lodging; breakfast generates 70 to 80 percent of the remaining turnover.
The mission to develop the 3-star brand
further still remains. Today, the 100-percent subsidiary of Steigenberger has 33
hotels in Germany and Austria. The next
opening wave is planned for 2013: a
168-room hotel in Leipzig, close to the
Steigenberger Grand Hotel, located
directly at the Troendlinring next to Westin
Leipzig; a 412-room flagship at the central station in Berlin (end of 2013); in
2014, the third InterCity in Hamburg is to
follow suit– at the Trade Fair at Dammtor
station. Just at the end of May, the InterCity Bonn opened with 161 rooms; for the
KEY DATA FOR AN INTERCITY HOTEL
Location: station, airport, traffic hubs
Number of rooms: in average 120-250
Room size: average size of 21 sq.m. +
Restaurants: 1
Bars: 1, part of the restaurant
Conference area: 300 sq.m. +
Business Corner
Contract types: lease, franchise
Contract durations: For lease 20 years
plus an option for another two periods
of five years each. For franchising 20
years.
Costs per room: 70,000 Euro, including
furniture and equipment
The founding
managing director:
Joachim Marusczyk.
Art in the restaurant
of InterCity Hanover.
45
Rooms of the elder generation,
at the InterCity Frankfurt central station.
official anniversary, a new hotel will open
in Darmstadt in September.
Location as factor of success
46
Among others, they are looking into locations in Great Britain, and, together with
the Austrian partner Porr Solutions, they are
looking for locations in Eastern Europe with
a focus on Poland; this cooperation was
started in September last year. A dream for
the expert of railway hotels Marusczyk
would be InterCity Hotels in France and
Italy, where many attractive properties are
still available at the stations.
Before Marusczyk announces a project officially, it has to be “70 percent sure” for him.
The core criteria remained the same, even if
an InterCity does not only have to be located
at a station today, but can also operate at
airports and other traffic hubs. Is he not
afraid of fast-expanding chains like IHG,
Hilton or Starwood, which are now occupying traffic hubs and penetrating the market
with chic midscale-products like Holiday Inn
Express, Hampton, Garden Inn or aloft?
Joachim Marusczyk remains calm: “We are
certainly recognising these new competitors.” Depending on the location, Park Inn,
Ibis, Motel One or Meininger are even taking away guests. But he still has a trump up
his sleeve: “In the end, all that counts is
location!” This in mind, Marusczyk, with his
past at the railway and his numerous priceless contacts to the world of railway properties, has a clear advantage.
Millions for the first generation
Even without the expansion speed of ICE
trains, InterCity enjoys a good image in the
October 2012
The first InterCity hotel opened
1991 at Frankfurt central station.
industry and among travellers. A plus
among guests is the free ticket for the local
public transport into the city, already introduced in 1991; this free ticket was part of
the concept from the very beginning. “All in
all, these free tickets cost us less than one
million Euro and it is fantastic marketing,”
says the Managing Director, still happy
about this decision.
However, the looming international competitors have led to a boost at renovations. In
the last two years, three and a half million
Euro were spent in the face-lifting of individual hotels. By 2015, all hotels of the first
generation will be renovated, which means
an additional investment of nearly ten million Euro.
The Managing Director of InterCity thinks
that the good reputation in the industry is
also attributed to the fact that InterCity has
been working together with only few partners for years now, and that InterCity has
never backed out during a contract. So far,
they have only parted from hotels when
contracts were expiring. In the middle of
May 2012, a contract with InterCity
Speyer expired, a former Steigenberger
Esprix Hotel. As it is located too far away
from the station according to today‘s strategy, InterCity did not want to operate this
hotel any further.
The InterCity Hotel GmbH does not own
hotels; only at three objects financed by
funds is there a convoluted share. The operating company usually signs lease agreements
for the duration of 20 years plus an option
for another two periods of five years each.
Little franchising and few partners
InterCity would like to push franchising fur-
ther, but it sees the adherence to quality
standards as a real challenge. The group
has participated in franchising only six
times so far: Four hotels are operated by
the Blodinger family (who successfully
established the brand Fleming‘s Hotels) in
Wuppertal, Bremen, Frankfurt and Munich
with contract durations of 20 years as a
rule. Franchising partner in the fifth franchise hotel in Schwerin is Hotel-Betriebsgesellschaft Grunthalplatz GmbH, in the sixth
hotel in Goettingen it is a private owner
and franchisee.
The number of development partners also
remains within reasonable limits: Among
the reliable partners are the Feuring Group
(for the hotels in Mainz, Berlin central station, and soon in Duisburg) and the B+L
Gruppe (for the hotels Hamburg Central
Station, Dresden, Leipzig, Hamburg
Dammtor-Messe).
At talks with the banks, Joachim Marusczyk
experienced, just like many of his colleagues, that the banks are only interested
in security. The hybrid agreements,
favoured by InterCity, containing a percentage lease in combination with a lower but
guaranteed fix lease, are not always being
appreciated.
But in the end, Joachim Marusczyk still contently stirs the spoon in the InterCity coffee
cup: “The InterCity Hotels are still located
at the best side of the station ...” // Maria
Puetz-Willems
October 2012
Hyatt Place comes to Europe – with regional adaptations
Competition for Garden Inn and Courtyard
Chicago. Following Hilton Garden Inn and Courtyard by Marriott, the Hyatt Hotels Corporation will also come to continental Europe next year with its American mid-scale brand, Hyatt Place. There are already more than 163 properties
of this brand in the USA with more than 20,000 rooms – thanks to the takeover of the former AmeriSuites. Meanwhile,
the jump over the pond will consider regional peculiarities, announced Gary Dollens, global head of franchise and select brands, in a conversation with hospitalityInside.com.
T
he first “Select Service Property” Hyatt
Place will emerge in Amsterdam. At the
end of 2012, at the latest in the middle of 2013, the Hyatt Place will open in
Amsterdam and with this, establish the gate
to continental Europe. At the same time, the
Hyatt Corporation also wishes to speed up
the expansion in Asia. But for North America, Europe and Asia, the concepts should
be adapted in the details.
The development of the today‘s Hyatt Place
brand began in January, 2005 with the
takeover of 146 AmeriSuites that Hyatt
renamed half a year later as Hyatt Place.
At the same time, they began to newly
design the hotel type and positioning so
that it fit under the quality roof of the parent
company. Today, the American Hyatt Place
Hotels are the absolute top and would
have to avoid no comparison with newly
emerging sister hotels in Europe or Asia,
says Gary Dollens.
“The look & feel will be same everywhere.”
There will not be a quality jump between
the existing and new properties – the guest
will not be disappointed by the brand. In
comparison: As reported, Marriott is currently directing a new European Courtyard
prototype, but is not, however, pushing for
the upgrading or adaptation of its older
properties.
Hyatt Place Hotels can be new buildings
or conversions, but the external appearance will not be subjected to standardisation: Virtually everything is permitted from a
Mediterranean style up to brick buildings.
A new building should originate on a property on 7,000 square metres of gross floor
space and in the best case, with the help
of local developers. As a rule, the hotel
size will range between 125 and 200
rooms. However, in Amsterdam, the opening will be with 330 rooms; they have
gotten together there with the Dutch real
estate developer, Hillgate Properties
(www.hillgate.nl).
They want to set up in Europe in the big cities with high travel volumes in or near large
traffic interchanges (airports, railway stations). The room size is adapted on the
regional level: In the USA, the rooms measure 30 to 34 square metres and in Europe,
these will be 25 to 30 square metres and
the largest rooms will be in Asia.
Another differentiation arises in the F&B concept: The self-service restaurant in the USA
gives way in Europe to a more generous,
In the U.S., 163 Hyatt Place are already in
operation.
“but still compact” restaurant area with Starbucks Café and wine specialities under the
name “The Gallery”. There will even be a
“private dining room” in the European Hyatt
Place. In comparison, a substantially greater
F&B zone will turn out in India.
Worldwide, the similar “Guest Kitchen” will
remain in the lobby – a sort of drop-in centre for all culinary cravings. There, the guest
can shop for or order small, freshly prepared snacks, salads or soups. They
receive the daily continental breakfast there
free of charge. If they wish for more, they
can select from a choice of egg dishes
from a touch screen in the morning – and
pay each time with their room key. They
can buy coffee or tea in the integrated
“Bakery Café” that will also be in every
Hyatt Place lobby.
Essentially, the guest can receive round-theclock smaller dishes and drinks – machine
ordered and freshly prepared and delivered to the table from the “Galery Host.”
Basically, room service is not offered; there
is an empty mini-fridge in the room for this.
Personnel costs saved with “Galery Host”
In spite of different sizes, the guests in every
Hyatt Place room will find a bath with
shower and WC. In the room
itself, there is a 42-inch flat
screen (HDTV) standard – with
connections for laptops and
MP3 players as well as beds
in king size or as a doubledouble and of course, a work
area.
As with most Select or Limited
Service concepts, there will
also be only one small cardiofitness centre at Hyatt Place
(“Stay Fit”), but no spa – and
analogously in addition, no
conference areas, but only one smaller
meeting space (if necessary, also several).
A business centre is hidden behind the
“eRoom” that conforms to the respective
size of the hotel. As with the public areas,
the (protected) high speed Internet access
in the room is included in the price.
These compact concepts primarily help
Hyatt save on personnel costs: 30 staff
members can look after a 125 to 145
room-large Place, reckons Gary Dollens. In
Europe, the staff member to room ratio may
lie a little higher due to the more vast F&B
offers. However, the “Galery Host” mentioned above will serve not only the breakfast, coffee or wine and bring it to the
table, but also check-in guests. // map
47
October 2012
Derag and Living Hotels on serviced apartments, hotels and marketing
It‘s all in the mix
Munich. For some time now, serviced apartments have been identified as promising niche products by numerous
investors and project developers. International chains like Ascott/Citadines, Accor/Adagio, Frasers or Adina/Medina
are pushing their global expansions. However, the largest German provider, Derag Livinghotels from Munich, is
growing only slowly. Since its start in 1982, Derag‘s portfolio today only comprises 14 aparthotels with about 2,600
rooms at locations like Berlin, Duesseldorf, Frankfurt, Munich and Vienna; three more hotels in Munich, Duesseldorf
and Frankfurt are currently planned. Managing partner Professor Dr. Max M. Schlereth continues to place his bets on
a manageable expansion on the well-established 70:30 mixture of serviced apartments and hotel rooms in a building.
Two years ago, he founded The Living Hotels as well, the first booking platform focussed on serviced apartments.
A background interview on the special segment, marketing and economic expectations.
48
Derag City Apartment Vienna
– the only hotel which is
currently not owned by Derag.
I
n an aparthotel, the number of hotel rooms
should not exceed 40 percent, otherwise
the cost structures will change,” states Max
Schlereth as he introduced his economic
reflections. Today, the 40-year old, who has
a professorship in business management
from the University of Applied Sciences in
St. Poelten, Austria, manages the business
his father Max, an engineer, established.
From the start, the apartment business has
been the focus, and only two of today‘s 14
properties have more rooms than apartments – in the Derag Hotel Grosser Kurfuerst
in Berlin, and in the Hotel Koenigin Luise in
Munich (www.deraghotels.de).
Apparently, the Derag business is a healthy
business. According to Schlereth, the aver-
age stay in the serviced apartments is 20
nights, but in the hotel rooms only two
nights. This reduces the overall average of
total overnight stays for both occupancy
types to four nights. “Through more hotel
rooms, we could certainly obtain a higher
average rate, but then we will be changing
the model,” says Schlereth, “however, a
stable turnover is more important for me.”
Derag Group is investor and operator at
the same time. All hotels are actually
owned by them except for the Derag Livinghotel City Apartments in Vienna. Generally,
the parent company has lease agreements
with the individual operating companies.
“We do not have any financing problems
with the banks,” emphasises the managing
director, who normally is very reluctant
about figures and reveals that Derag‘s
return on investment (ROI) is “respectably
high” – definitely above seven percent.
Cost reduction is „natural“
At the moment, classical hotels have difficulties obtaining classical bank financing;
however, it seems to be less problematic
with serviced apartments. According to
Schlereth, one reason is the easy usability
by third parties, which is possible with this
type of accommodation (e.g. re-structuring
to an office); but the main reason is the
operative cost reduction. Compared to a
hotel, the largest saving effect compared to
hotels is achieved through reduced process
October 2012
costs: Check-in and administration are less
expensive; housekeeping/cleaning can be
outsourced. All this contributes to the reduction of staff costs and therefore enables a
lesser break even concerning occupancy.
In addition, the manager is concerned
about the financing of hotels: In his opinion, today‘s more frequent financing by
institutional providers leads to a clash of
interests with the hotel industry. “Funds, for
example, aim at profit maximisation; operators work in a turnover-oriented manner.
The funds investors have no idea about the
hotel business, but they have to supply
fresh money, if necessary. This means that
capital is misdirected because of misinformation.”
However, he basically regards the new
interests of institutional as well as private
investors of all kinds in the segment of serviced apartments as something positive:
“Everyone is in a kind of discovery state.”
High occupancy rates
Derag Living Hotels increased
the average occupancy of its
hotels from 67.5% in 2009
to 70.2% in 2010 and
71.8% in 2011. Schlereth
does not reveal any RevPar.
The “Treugast Investment Ranking” 2011 ranks Derag Hotel
and Living (including all subsidiaries) with “A”, indicating
a potential upgrade in the
2012 ranking. According to
Treugast, the group generated
a revenue of 37.87 million
Euro with 10 properties in
2010, average occupancy
was 70.2%, ADR at 64.45
Euro, RevPar at 45.24 Euro.
In the majority of the aparthotels, agerelated renovations have to be carried out.
In some hotels, the entire value-added-tax
reduction has been completely re-invested.
Every hotel will be renovated floor by floor,
and in the newer hotels will obtain a more
modern design, without the look of a
“design hotel”. Max Schlereth regards the
construction of the first “zero-energy hotel”
as economically conceivable success; the
hotel opened in Munich in September
2011. At the end of this year, he will be
able to present the first concrete comparative figures between classical and alternative constructions. Because of the combination of hotel rooms and serviced apartments,
Derag started to think about a special booking engine for the special product of apartments. At the end of 2010, “The Living
Hotels” was launched in cooperation with
Trust International (www.living-hotels.com).
This is not only a booking platform but also
an active sales and marketing support for
member hotels – from corporate agreements
for global business customers over crossselling between partner hotels to trade show
appearances. Today, the online distribution
channels include all the important online
travel agencies (Expedia, hotel.de, etc.)
and the GDS linked to 650,000 travel
agencies.
In contrast to other hotel booking systems
that also market serviced apartments, the
CRS of Living Hotels states both room types
– scaled from cheaper rates (= serviced
Professor Dr.
Max M. Schlereth
and Nicole Scholz.
apartments) to more
expensive rates (= hotel
rooms). In addition, both
segments can be opened
and closed separately. “In
this way, apartments can
continue to be sold even if
a hotel night is booked
out in the requested time
period,” says Nicole Scholz, Director of
Operations and Business Development The
Living Hotels, describing the advantage.
Subtleties of online displays
Unlike hotel rooms, the rates of serviced
apartments are not only displayed according to the seasons but also in dependency
to the duration of the stay (the longer the
stay, the cheaper the apartment rate per
night). However, this is also visible in the
hotel booking systems of chains like Accor
or Marriott, for example.
With most providers, the rate split is nearly
the same: from the third or fourth night on,
the guest is most often categorised as a
long-term guest and obtains the cheaper
rate. After that, there are various rate graduations, depending on the duration of the
stay – up to the 29th or 30th day. Here, the
online bookability in a hotel reservation system normally ends. At The Living Hotels this
is different: The system enables “endless”
bookings but Nicole Scholz admits that there
are special rates being negotiated for
months-long stays. Accor has also realised
this gap. Vangelis Porikis, Director Marketing
and Sales for Accor in Paris, announced:
“At the end of May/the beginning of June,
we will introduce a new booking engine for
one to three months – with a new technology where availability and rates can be
recalled for up to three months.”
The Living Hotels as specialist wants even
more: “Currently, we are working on apartment rates especially for companies without
them having to obtain a new rate code,”
announces Nicole Scholz. In two weeks,
however, the new and refined booking
engine of Trust will go online first.
Increase in sales
by The Living Hotels
The Living Hotels is an independent subsidiary of Derag. Derag is “only” a customer of
Living Hotels, as Nicole Scholz emphasises.
Derag manager Max Schlereth is convinced
of the independent booking system. Via Living‘s distribution channels, his hotels were
able to double their turnovers from 2010 to
2011. Living Hotels reports that it was able
to increase all bookings by 85 percent and
all generated turnovers by 84 percent in the
first four months of 2012 (compared to the
first four months in 2011). The number of
overnight-stays even increased by 96 percent, according to Living.
Agreements concerning sales, marketing
and distribution cooperation are normally
valid for two years. The one-off admission
fee amounts to 1,500 euros, the monthly
membership fee 500 euros. In addition,
there are the reservation fees and requested
services – such as the connection of the
aparthotels to Google. “This is a unique
service we are able to provide, thanks to
Trust,” says Nicole Scholz.
Apart from the 14 Derag hotels, seven
additional hotels are participating in the
sales and booking platform, among them
now the Amadeo Hotel Schaffenrath in
Salzburg with 76 rooms and apartments,
the Dolder Waldhaus with 100 rooms and
apartments, and the Derag Livinghotel
Duesseldorf. // Maria Puetz-Willems
49
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